German 10-Year Yield Below Zero: How Busy Ceos Make It All Work

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Andrew Browne
How Busy CEOs Beijing’s
Wounded Psyche
Make It All Work Is on Display
MANAGEMENT | B1, B5 CHINA’S WORLD | A2
WEDNESDAY, JUNE 15, 2016 ~ VOL. XXXIV NO. 94 WSJ.com EUROPE EDITION
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What’s German 10-Year Yield Below Zero

News U.K. vote and other
global political risks
bility.
Bond yields in Europe have
been sliding for a year,
“The fact that Brexit is now
perceived as a possibility is a
total game-changer, and it’s
nent. Price action in the Euro-
pean bond markets Tuesday
echoed the patterns seen dur-
Other countries with debt also
perceived as safe—the U.S.,
Japan, and, interestingly, Brit-
send investors into weighed down by aggressive very difficult to estimate the ing the eurozone’s debt crisis ain—all also saw their govern-
Business & Finance central-bank bond buying, macroeconomic impact,” said in 2011 and 2012, when inves- ment-bond yields fall. Falling
haven of bonds negative short-term rates and Franck Dixmier, global head of tors also contemplated the yields mean rising prices.
skepticism about an economic fixed income at Allianz Global rupture of the European Italian, Portuguese and Spanish
Y ields on German bunds
fell below zero for the
first time, as concerns
BY MIKE BIRD recovery that seems persis-
tently to falter.
Investors.
The campaign over Britain’s
Union.
The 10-year German bund
government-bond yields all rose,
and the gaps between their yields
Yields on the 10-year gov- But the catalyst for Tues- June 23 referendum has yield closed Tuesday at minus and the 10-year bund reached their
mounted that Britain
ernment debt of Germany sank day’s drop into negative terri- hummed along in the back- 0.008%. Investors will now highest levels since February.
might quit the EU. A1
below zero Tuesday for the tory appeared to be a mount- ground of most financial mar- pay Germany to hold their Please see YIELD page A2
The Bank of Japan faces
first time ever, a potent finan- ing assessment among kets for months. It is now money for a decade—although
pressure to step up stimulus
cial marker of Europe’s acute investors that Britain might coming to the fore—and not much, just eight cents a Streetwise: Investors finally
measures but ‘Brexit’ worries
economic and political insta- quit the European Union. spreading across the conti- year for every thousand lent. are afraid over U.K. vote..... B7
complicate its decision. A6
Takata is selling shares
it owns in car makers as
the company faces mount- Labor-Law Protesters Take On the Authorities in Paris U.S. Party:
ing costs linked to recalls
of defective air bags. B1
The SEC staff recom-
mended that the agency
Russians
approve IEX’s bid to launch
a new stock exchange. B7 Hacked
PwC is in talks with U.S.
regulators over whether the
auditor is too close to some
Computer
mutual-fund clients. B7
BY BYRON TAU
Asian demand and pro- AND DAMIAN PALETTA
duction outages could eat
away today’s oil glut by the
WASHINGTON—The Demo-
end of 2016, the IEA said. B7
cratic National Committee’s
American firms that cut computer systems were com-
their tax bills after moving promised by hackers linked to
abroad still enjoy perks from the Russian government, in
the U.S. government. B1 one of the largest known
breaches of a U.S. political or-
A U.S. court upheld the
ganization, party officials said
government’s net-neutral-
Tuesday.
ity rules for oversight of
CrowdStrike, a security firm
broadband service. B3
hired by the Democratic Party
FRANCOIS MORI/ASSOCIATED PRESS
Alibaba projected a 48% after the intrusion was discov-

sales rise this fiscal year in ered, found that two known en-
its first revenue forecast. B3 tities with ties to the Russian
government had separately
World-Wide hacked the party’s information-
technology infrastructure.
They were the same groups
The Democratic Party that successfully penetrated
said its computers were the unclassified networks at
hacked by groups linked to CONFRONTATION: A woman with a poster reading ‘Everyone hates the labor law’ argued with riot police at a demonstration on Tuesday. the White House, State Depart-
Moscow, in one of the larg- Thousands of people participated in demonstrations called by unions and student groups against a proposed law to loosen labor rules. A6 ment and U.S. Joint Chiefs of
est known breaches of a U.S. Staff, the firm said.
political organization. A1 The Washington Post, which
earlier reported the DNC intru-
Obama assailed Trump
Obama: Trump’s Plan ‘Dangerous’

sion, said the party’s entire file
over his call to bar Muslims of opposition research against
after the Orlando shooting, presumptive Republican presi-
saying his approach would dential candidate Donald
make the U.S. less safe. A1 BY BYRON TAU In remarks in Washington, the true leaders of over a bil- that matter, the American peo- Trump had been copied.
House Speaker Ryan re- AND FELICIA SCHWARTZ Mr. Obama took aim at the Mr. lion Muslims around the world ple. When I am president, it The two groups “engage in
jected Trump’s proposal Trump’s renewed call to bar who reject their crazy no- will always be America First.” extensive political and eco-
and called for an alliance WASHINGTON—President Muslims from entering the tions,” Mr. Obama said, warn- In a tweet to the “LGBT com- nomic espionage for the bene-
with moderate Muslims. A8 Barack Obama and his former country. He said such an ap- ing against “painting all Mus- munity,” Mr. Trump pledged: fit of the government of the
A French police officer Secretary of State Hillary Clin- proach toward immigrants lims with a broad brush.” “I will fight for you while Hil- Russian Federation and are be-
and his companion were ton denounced Donald Trump would only serve to alienate Mrs. Clinton, the presump- lary brings in more people that lieved to be closely linked to
killed at their home near on Tuesday, saying his pro- American Muslims as well and tive Democratic nominee, will threaten your freedoms the Russian government’s pow-
Paris by a man who pledged posed antiterrorism policies weaken America’s defenses. knocked Mr. Trump on Tuesday and beliefs.” erful and highly capable intelli-
allegiance to Islamic State. A1 were “dangerous” and will “Are we going to start treat- in Pittsburgh with a similar The debate over terrorism gence services,” wrote Dmitri
make America less safe, while ing all Muslim Americans dif- message to Mr. Obama’s, calling and immigration policy takes Alperovitch, co-founder of
The Labour Party leader the presumptive Republican ferently?” Mr. Obama asked. Mr. Trump’s approach “un- place as Mr. Trump is working CrowdStrike, in a blog post
urged supporters to vote for nominee countered that Mr. “It doesn’t reflect our demo- American” and “dangerous.” Please see OBAMA page A2 about the company’s response
Britain to remain in the EU Obama “prioritizes our enemy” cratic ideals. It won’t make us Mr. Trump fired back, say- to the incident.
as polls showed gains for over the American people, rap- more safe, it will make us less ing: “President Obama claims Ryan rejects Muslim ban.... A8 Presidential campaigns can
“leave” proponents. A3 idly escalating their fight over safe,” he said. to know our enemy, and yet he Gay dating app is probed in be intelligence gold mines for
Asean foreign ministers how to best stop attacks in the Groups like Islamic State continues to prioritize our en- Orlando shooting..................... A8 foreign adversaries. There is
voiced “serious concern” wake of the Orlando shootings. “want to claim that they are emy over our allies, and for Fear of homegrown terror... A9 Please see HACK page A8
over tensions in the South
China Sea but later re-
tracted the statement. A6 A Texas Town Goes Huge That Coffee Taste Stale? It Could Be Nine Years Old
EgyptAir investigators
said findings suggest that On Tiny Houses
Flight 804 wasn’t brought i i i
down by an abrupt blast. A4
Brazil’s Supreme Court Then backs off as eco-first builders
JORDAN HOLLENDER FOR THE WALL STREET JOURNAL
stripped ex-leader da Silva

of privileged legal protection propose yurts and straw dwellings
in a corruption probe. A4
BY LUKAS I. ALPERT 1,000 residents located 75
Inside SPUR, Texas—Nearly two

years ago, this town of cotton
miles east of Lubbock, talk
soon began to surface about
plans to build yurts, straw
KEYWORDS B1 farmers and cattle ranchers in dwellings and even under-
the rolling plains of West ground dugouts resembling
Why Microsoft Texas declared itself the tiny
house capital of America.
something out of “Lord of the
Rings.”
Bought LinkedIn The hope
was to reverse
That was
too much for
a long popula- the tradition- NOT-SO-INSTANT COFFEE: Arabica coffee that had been stored away as markets cratered in 2013 is
CONTENTS Money & Inv.... B7-12 tion decline by minded folks now pouring out of warehouses. Above, coffee made with newer beans is served in Brooklyn, N.Y. B7
Arts & Ent.............. A11 Opinion.............. A12-13
Business & Tech. B1-4 Personal Journal... A10
luring devo- of Spur. In
Crossword.............. A14 Property Report... B8 tees of the March, the
Heard on Street. B12 U.S. News............. A8-9 growing move- town council
Management............B5 Weather................... A14 ment of eco- hired a build-
Markets Digest.. B10 World News....... A2-6
€3.20; CHF5.50; £2.00;
conscious, do-it-yourself build-
ers who like to live in very
ing inspector and passed an
ordinance that requires de-
French Police Officer Slain in Terror Attack
U.S. Military (Eur.) $2.20
small houses. Town officials signs to be submitted for ap- BY INTI LANDAURO for followers in the West to tained three people with links
thought their official procla- proval. AND MATTHEW DALTON carry out attacks. to him after the attack, Mr.
mation and elimination of Spur also stipulated that Paris Prosecutor François Molins said.
nearly all building restrictions tiny houses be connected to PARIS—A man who pledged Molins identified the suspect The victims were named as
would attract the kind of ador- the electrical grid, water sup- allegiance to Islamic State as Larossi Abballa, a 25-year- Jean-Baptiste Salvaing, the 42-
able abodes featured on televi- ply and sewer system. Before killed a police captain and his old Frenchman who police year-old deputy police chief in
sion shows like HGTV’s “Tiny that, the only rule was that companion in a suburb of the killed after storming the cou- the nearby town of Les Mu-
s Copyright 2016 Dow Jones & House Hunters.” houses on wheels be put on French capital, a slaying au- ple’s house and who had been reaux, and Jessica Schneider,
Company. All Rights Reserved
Some newcomers had other concrete foundations because thorities suspect was sparked known to authorities for being 36, an administrative assistant
ideas. In the town of about Please see TINY page A8 by the extremist group’s calls a radical Islamist. Police de- Please see ATTACK page A4
A2 | Wednesday, June 15, 2016 THE WALL STREET JOURNAL.
WORLD NEWS
The Dangers of China’s Victim Mentality it lay vanquished by a

smaller Asian power. That
cruel blow sparked a na-
tional awakening.
N
otwithstanding
China’s modern
CHINA’S WORLD strength, the country
ANDREW BROWNE has never fully rediscovered
its self-esteem.
The experience of deep
SHANGHAI—In the national shame is the start-
countdown to a legal verdict ing point of President Xi Jin-
on China’s sweeping claims ping’s “China Dream” that
KALAYAAN ATIN ITO/AGENCE FRANCE-PRESSE/GETTY IMAGES

to the South China Sea, an imagines a glorious revival
increasingly frantic Beijing of the country’s ancient
is mobilizing a diplomatic place of pre-eminence. And
offensive around three core in the South China Sea it has
arguments: that the U.N.- produced a contradictory
backed tribunal has no legal mix of swaggering bravado
right to hear the case, that and cowering defensiveness.
America has instigated all The specks of territory in
the trouble and that China dispute may be insignificant,
is the victim. but that’s not the point. For
Pay spe- China, “every inch” of the
cial attention motherland is sacred, as the
to the last of Communist Party propagan-
these. If, as dists constantly insist, and
expected, the each incursion by rivals is a
panel rules An activist held a Philippine flag while a Chinese Coast Guard ship sailed by at the Scarborough Shoal in the South China Sea. reminder of its “century of
against humiliation.”
China there will be a power- tive and destabilizing.” Chi- ment of Treaty and Law. Xu command the world’s busi- trators of the United Nations China fears that if Ma-
ful nationalist backlash. nese fighter jets have twice Bu, China’s ambassador to est commercial waterway Convention on the Law of nila wins the case in The
It will be heightened by come dangerously close to the Association of Southeast by building fake islands the Sea, sitting in The Hague, Hanoi and Jakarta
China’s acute sense of vic- U.S. surveillance flights in Asian Nations, argues that atop half-submerged reefs Hague, have no business tak- may be tempted to initiate
timhood—a conviction that recent weeks, according to the conspirator behind the fitted with long runways ing up the matter; countries copycat suits. Beijing has
the West, led by the U.S., is the Pentagon. scenes is a “dictatorial and that can land the largest like the Philippines and Viet- vowed to ignore the tribu-
out to thwart its rise and overbearing” U.S. that “can- warplanes. Sea lanes swarm nam, coveting oil beneath nal’s ruling, even at the risk
A
once again enslave its peo- landmark case born not tolerate others challeng- with Chinese paramilitary the seabed, started grabbing of branding itself an inter-
ple. That belief often stirs vi- of the injured feelings ing its global hegemony.” armadas. Gray naval ships bits and pieces of Chinese national outlaw and sacri-
olent public emotion, such as of the Philippines, Manila has challenged lurk in the background. Mis- territory in the 1960s and ficing its moral authority.
when American warplanes which launched legal pro- China’s claims to a vast body sile batteries point to the 70s and building on them, We’re about to enter a
accidentally bombed the Chi- ceedings three years ago af- of water—around 80% of the skies; radar installations just as China has done; potentially more dangerous
nese Embassy in Belgrade in ter the Chinese navy effec- South China Sea—within a scan the horizon. lately, President Barack phase of a struggle over a
1999. This time, a military tively seized a rich fishing “nine-dash line” that encom- Littoral states, eyeing this Obama has supported their stretch of water that’s be-
response can’t be ruled out. ground off its main island of passes hundreds of islands, buildup, are rushing to buy aggression with his military come a proxy for a broader
Washington is signaling Luzon, is ending with a dis- rocks, reefs and sandbars. arms and begging the U.S. “pivot” to Asia. contest between the estab-
apprehension China may de- play of China’s wounded The tribunal hasn’t been for protection. The victimhood narrative lished American super-
clare an air-defense identifi- psyche. asked to rule on sovereignty, is at the heart of a Chinese power and a rising Asian
Y
cation zone over the South “China is the victim of only on the legal status of et China manages to nationalism that historians challenger.
China Sea, similar to one it the South China Sea issue,” disputed islands and reefs; portray itself not as trace back to the end of the Beware a China that
set up over the East China writes Yang Yanyi, the Chi- Beijing contends the issues the predator but the 19th century when China feels victimized; an ag-
Sea in 2013. U.S. Secretary of nese ambassador to the Eu- are inseparable and has re- prey. was defeated by Japanese grieved, resentful, back-
State John Kerry, looking ropean Union. The case is “a fused to take part in the ar- Its logic goes like this: land and naval forces. West- ward-looking power is likely
ahead to the verdict, warned vicious act,” says Xu Hong, bitration. These scattered outcrops ern nations had earlier to lash out more destruc-
that Washington would con- the director-general of the To back up its territorial have been China’s “since an- brought China to its knees tively than one confident of
sider such a move “provoca- foreign ministry’s Depart- claims, China has sought to cient times,” hence the arbi- in the Opium Wars. But now its place in the world.
OBAMA America in the first place was

because we allowed his family
to come here,” Mr. Trump said
about Omar Mateen, the U.S.-
ment in my 7½ years as presi-
dent where we have not been
able to pursue a strategy be-
cause we didn’t use the label
Continued from Page One born man police have said was ‘radical Islam.’ Not once has an
to unite the Republican Party the gunman. His parents emi- adviser of mine said, ‘Man, if
behind him. While he has the grated to the U.S. from Af- we use that phrase, we are go-
support of the Republican Na- ghanistan. ing to turn this whole thing
tional Committee and many In an earlier television inter- around.’ Not once,” Mr. Obama
prominent Republicans, his view, Mr. Trump also suggested said.
SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES
controversial statements and that Mr. Obama was sympa- Mr. Obama personally
policy stances continue to give thetic to Islamic terrorists. worked on the remarks he
some allies pause. “Look, we’re led by a man gave at Treasury on Monday
House Speaker Paul Ryan that either is not tough, not night and Tuesday morning.
(R., Wis.), who recently agreed smart, or he’s got something White House press secretary
to back Mr. Trump, said Tues- else in mind,” Mr. Trump said Josh Earnest said. Mr. Earnest
day that the U.S. should on Fox News on Monday. “And said he wasn’t aware of any di-
tighten its screening process the something else in mind— rect coordination with the
of refugees entering the coun- you know, people can’t believe Clinton campaign on his re-
try, rather than impose a reli- it. People cannot, they cannot marks but said the similarity
gious test as Mr. Trump pro- believe that President Obama wasn’t a coincidence.
poses. is acting the way he acts and “President Obama and Sec-
The fight has been boiling can’t even mention the words retary Clinton have similar ap-
up for several days. Mr. Trump ‘radical Islamic terrorism.’ Mr. Obama said that Donald Trump’s proposed ban on Muslim immigration would make the U.S. less safe. proaches and consider the
used an appearance in New There’s something going on. homeland security of the
Hampshire on Monday to at- It’s inconceivable. There’s scribe terrorist attacks. Mrs. Clinton also said Mr. Council meetings are battle- United States a top priority,”
tack both Mr. Obama and Mrs. something going on.” “Calling a threat by a differ- Trump was fixated on “radical field assessments, but on Mr. Earnest said. “They agree
Clinton, portraying them as Mr. Obama also leveled his ent name does not make it go Islam” as a magic word that Tuesday he revealed his frus- that these are principles worth
weak on foreign policy and na- sights at his critics, including away,” Mr. Obama said. “There “once uttered, would stop ter- trations with the tenor of the fighting for and articulating
tional security. Mr. Trump, who have criti- is no magic to the phrase ‘radi- rorists.” campaign cycle with a fiery re- and that the use of the word
“The bottom line is that the cized him for failing to use the cal Islam.’ It is a political talk- Usually Mr. Obama’s re- buke. ‘radical Islam’ is a political
only reason the killer was in term “radical Islam” to de- ing point. It is not a strategy.” marks after National Security “There has not been a mo- talking point.”
YIELD tive bond yields have risen.”

Stocks in Europe continued
to slide Tuesday. Britain’s
FTSE 100 closed down 2%, the
ments elsewhere.
“There’s rising populism in
Europe in general, and the
U.K. referendum could open a
overs regarding political risks,”
said Jan von Gerich, analyst at
Nordea Bank AB. “On this mea-
sure, especially Dutch, Italian and
German government debt cur-
rently offering a zero or negative
yield. Last week, German lender
Commerzbank AG estimated that
tiveness.
—Jon Sindreu and Riva Gold
contributed to this article.
Continued from Page One French CAC-40 fell 2.3% and door,” Mr. Dixmier said. “A ta- French bonds look vulnerable.” almost two-thirds of outstanding
“This could be microcosm Spanish and Italian markets boo has been broken, what- For investors, the bund’s German sovereign debt now
of what could happen if the each fell 2.1%. Eurozone bank ever the outcome of the vote, move below zero highlights an yields below minus 0.4%.
U.K. votes for ‘leave.’ Safe sov- stocks fell 2.6%. and there could be referen- investment world of increas- Bunds have been a popular See the story develop.
ereign bonds should be stron- The slide in bond yields dums in other European coun- ingly low returns. The 10-year haven since at least the 1970s,
ger, but equities and sovereign may not be over. tries. Markets and investors bund joins some $10 trillion when Germany’s central bank, Download on the App Store
bonds on the eurozone periph- With political risks around will have to live with that.” worth of global sovereign debt the Bundesbank, gained kudos
ery would sell off,” said Dar- the world mounting, investors Still, the effects are hard to with negative yields. for avoiding the high inflation
ren Ruane, head of fixed in- see room for haven yields to predict. Investors might The yield on the British of other advanced economies. THE WALL STREET JOURNAL.
come at Investec Wealth & fall even further—especially if choose to sell debt of smaller government’s 10-year debt Germany is one of only a Europe Edition ISSN 0921-99
Investment. “In some of those Britain votes to leave and cen- countries or those that are closed at 1.145% Tuesday, a re- handful of countries with a The News Building, 1 London Bridge Street,
London, SE1 9GF
peripheral countries, radical tral banks ramp up stimulus. more fragile. cord low, and the Japanese triple-A rating from all the
parties may come to the fore, A British vote to leave “Market worries will probably government’s 10-year bench- major rating firms and has a Thorold Barker, Editor, Europe
Bruce Orwall, Senior Editor, Europe
and it makes sense that posi- could embolden anti-EU move- be more determined by spill- mark bond yield fell even fur- constitutional law that limits Cicely K. Dyson, News Editor, Europe
ther into negative territory, future annual deficits to 0.35% Margaret de Streel, International Editions Editor
Darren Everson, Deputy International Editor
below -0.16%. of GDP.
Bund Below Zero Investors believe that It is also the biggest of Joseph C. Sternberg, Editorial Page Editor
Yield on the 10-year German government bond yields on the longer-term debt those countries, meaning it Anna Foot, Advertising Sales
from countries like Belgium, has a comparatively large Jacky Lo, Circulation Sales
Andrew Robinson, Communications
Inflation spikes around the world The reunification of East German bonds only become the Netherlands and Austria amount of debt that makes it Stuart Wood, Operations
in the 1970s, but Germany's Germany and West Germany in more popular as the financial could be next to fall below easier for investors to buy Jonathan Wright, Commercial Partnerships
Bundesbank earns plaudits for 1990 causes a bout of political crisis unravels, with yields falling zero. and sell, adding to its attrac- Katie Vanneck-Smith,
controlling the rise in prices more uncertainty, sending bond yields further through the subsequent “It’s psychologically very Global Managing Director & Publisher
than the U.S. and U.K. higher. euro crisis. different,” said Paul Flood, a
CORRECTIONS
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European and most Asian mining consultant John Rids- (Broxbourne) Limited, Great Cambridge Road,
Waltham Cross, EN8 8DY
6 equity markets are down this del, who was killed in the
Registered as a newspaper at the Post Office.
year, while the yields on in- southern Philippines in April Trademarks appearing herein are used under
4 vestment-grade corporate after being taken hostage by license from Dow Jones & Co.
©2015 Dow Jones & Company. All rights reserved.
bonds have also been pushed Islamist militants, was mis- Editeur responsable: Thorold Barker M-17936-
lower. spelled as Ridsel in a World 2003. Registered address: Avenue de Cortenbergh
60/4F, 1040 Brussels, Belgium
2
Anglo-Dutch consumer- Watch item Tuesday about the
goods giant Unilever even has death of another Canadian NEED ASSISTANCE WITH
0 a bond maturing in 2020 that hostage. YOUR SUBSCRIPTION?
1960 1970 1980 1990 2000 2010 now yields around minus By web: http://services.wsje.com
Readers can alert The Wall Street By email: subs.wsje@dowjones.com
Note: Monthly data, most recent figure as June 14, 2016 0.02%. Journal to any errors in news articles By phone: +44(0)20 3426 1313
Source: Federal Reserve Bank of St. Louis THE WALL STREET JOURNAL. The 10-year bund joins other by emailing wsjcontact@wsj.com.
THE WALL STREET JOURNAL. Wednesday, June 15, 2016 | A3
WORLD NEWS
U.K. Labour Fights ‘Brexit’ NATO Ministers
Opposition leader calls
on voters to opt for
Add Cyberspace
staying in EU, as polls
show gains for ‘leave’ As War Domain
BY NICHOLAS WINNING BY JULIAN E. BARNES sibility for cyberintrusions and
cyberattacks is a priority for
LONDON—The leader of the BRUSSELS—Allied defense the alliance, Mr. Stoltenberg
U.K.’s opposition Labour Party ministers formally recognized said.
issued a rallying cry to sup- cyberspace as a domain of “One of the challenge when
porters on Tuesday to vote to warfare on Tuesday, an ac- it comes to cyber is it is not
remain in the European Union, knowledgment that modern easy to tell who is attacking
as the latest opinion polls pro- battles are waged not only in you,” he said.
vided further indications that air, sea and land, but also on The decision by the minis-
those campaigning to leave computer networks. ters will allow the alliance to
are gaining momentum. The move comes the same better coordinate its cyber-
Conservative Prime Minis- day the Democratic National space efforts and defenses, Mr.
ter David Cameron—who is Committee said its computers Stoltenberg said.
spearheading the push to stay had been hacked by the Rus- “This is about developing
in the EU ahead of the coun- sian government. DNC officials our abilities and capabilities
try’s June 23 referendum— said the hackers made off with to protect NATO cyber-net-
hasn’t made a significant in- opposition research related to works but also to help and as-
tervention in the debate since Donald Trump, the presump- sist nations in defending their
Sunday amid signs that his tive Republican nominee for cyber-networks,” he said.
warnings about withdrawing president. For now, the alliance is fo-
from the bloc aren’t connect- The North Atlantic Treaty cused on defending its own se-
LUKE MACGREGOR/BLOOMBERG NEWS
ing with some voters, includ- Organization’s effort is de- cure networks and helping al-
ing those who favor Labour. signed to bolster allies’ cy- lies build their cyberdefenses.
Some senior Labour figures berdefenses, but also will be- Tuesday’s announcement to
have warned in recent days gin a debate over whether the recognize cyberspace as new
that the party had so far failed alliance should eventually use sphere of conflict or battle-
to sufficiently reach out to its cyberweapons that can shut ground constitutes a bit of
supporters. down enemy missiles and air catch-up by the alliance. The
Labour leader Jeremy Cor- defenses or destroy adversar- U.S. military, for example, has
byn, speaking at a public ap- ies’ computer networks. expanded its cyber-command,
pearance with senior Labour After the meeting of NATO improved its training and de-
lawmakers and trade-union of- Advocates for the U.K. remaining in the European Union rallied in London on Tuesday. defense ministers to approve veloped weaponry and de-
ficials in London, said the the move, Jens Stoltenberg, fenses to deploy in cyberspace.
party’s supporters should vote prompting questions among Tuesday that the U.K. had the state-funded National Health the NATO secretary-general, The change comes as the
to remain in the EU next week some analysts and members of right to deny some EU nation- Service. said it was impossible to number of cyberattacks
to safeguard workers’ rights, the public about his commit- als child benefits and child Labour has been arguing imagine a military conflict to- against the alliance and mem-
such as decent working condi- ment. tax-credit payments if they that withdrawal from the EU day without a cyber dimen- ber states has been increasing,
tions and less discrimination. Mr. Corbyn has said the failed to meet the U.K.’s right- would lead to an economic sion. a senior NATO official said.
“We believe that a leave party backs staying in the EU of-residency test. shock that would result in “This is important to all By making cyberspace a
vote will put many of those but that he remains critical of Mr. Cameron made restrict- lower tax receipts and lead the possible conflicts we can fore- warfare domain, NATO will
things seriously and immedi- what he sees as the bloc’s ing the rights of EU nationals Conservative government to see,” he said. open the door to stepped-up
ately at risk,“ Mr. Corbyn said. shortcomings. to some U.K. benefits a key introduce more spending cuts Mr. Stoltenberg declined to military planning, dedicate
“We urge all of our support- He has also disputed the plank in his push to renegoti- that would hit health and address the suspected cyber more officers to cyber opera-
ers: Think very carefully about Conservative government’s ate Britain’s relationship with other public services. hack on the DNC, and wouldn’t tions and better integrate
this and vote to remain next warnings of damage to the the bloc. “I would not be voting for name any potential cyber-ad- electronic warfare into its mil-
Thursday on the 23rd.” British economy if the U.K. Meanwhile, Vote Leave, the remain if I thought there was versaries, noting that NATO’s itary exercises.
Opinion polls in recent days leaves the EU. official pro-Brexit campaign any risk whatsoever to our Na- cyberdefenses weren’t aimed Two years ago, at the previ-
suggest support has swung in Mr. Cameron and other pro- group, has argued that Britain tional Health Service,” Mr. at any one country. U.S. and ous summit in Wales, NATO
favor of leaving the EU. An EU EU campaigners have focused needs to leave the bloc to re- Corbyn said. allied officials have previously leaders announced a cyberat-
referendum poll-of-polls calcu- on the economic argument for gain control over policy-mak- “A vote to leave is a vote said Russia remains the great- tack on one ally could trigger
lated by NatCen Social Re- staying in the EU, warning ing on immigration and trade, that will put the NHS in jeop- est cyberthreat to the alliance. the alliance’s collective de-
search, which is based on the that exiting could trigger a re- and said that the U.K.’s contri- ardy—in the hands of those “We know about ‘Russian fense provisions.
average share of the vote for cession and leave the economy butions to the EU budget who want to break it up and hackers linked to the Russian Under NATO’s founding
leave and remain in the six permanently poorer. would be better spent at home end it as a service that is free government’ only from the treaty, each ally primarily has
most recent polls of voting in- The EU’s top court ruled on on institutions such as the at the point of use,” he added. Western media. They are ex- responsibility for its own de-
tentions, shows leave with 51% isting in the Western media,” fense. But NATO officials ac-
and remain with 49%, exclud- Maria Zakharova, a spokes- knowledge that the alliance is
ing people who are undecided.
Three weeks ago, the poll-
Defense Chief Sees Security Risk to West in Exit woman for the Russian For-
eign Ministry, said on Tuesday.
only as strong as its weakest
link, which makes helping na-
of-polls showed remain with BRUSSELS—Britain’s top de- missed government estimates larger members of the Euro- Developing capabilities to tions improve their cyber ca-
55% and leave with 45%. fense official said a U.K. exit about the costs of exiting the pean Union leaving would only more quickly attribute respon- pabilities a priority.
An online poll of almost from the European Union EU, suggesting officials have complicate” the ability of the
2,500 people, published on would drive down British mili- exaggerated the potential cost two regional organizations to
Tuesday by TNS Omnibus, put tary spending and weaken the to the economy and therefore coordinate their responses to
support for leaving the EU in security of the West. to government finances. overt or covert threats and
the lead with 35% of the vote, Defense Secretary Michael “No country has ever left other challenges, he said.
with those favoring remaining Fallon said Britain would still NATO or the EU, which are the Mr. Fallon said the murder
at 33%. The remainder were spend 2% of its gross domestic twin pillars of European secu- of a French police officer and
undecided or didn’t plan to product on military spending— rity, NATO with military might his partner in Magnaville,
vote. as members in the North At- and the European Union with France, late Monday by a
Adjusted for likely turnout lantic Treaty Organization have economic muscle and the legal Frenchman with a previous ter-
JOHN THYS/AGENCE FRANCE-PRESSE/GETTY IMAGES
among different groups, the pledged to do—if the U.K. were power to enforce sanctions,” rorism conviction shows the
leave camp is projected to get to exit the EU. Mr. Fallon said. “For a major continuing threat of terrorism
47% of the vote, while its op- But an ensuing economic country like Britain to leave ei- and the need for the U.K. stay-
ponents are seen taking 40%, downturn would lower all the ther of those partnerships ing engaged with Europe.
TNS said, with the rest unde- numbers, he said. would weaken the collective “The murder last night
cided or not planning to vote. “The spending figure would security of the West. I hope shows just how real and close
Some pollsters and analysts be smaller, spending on pen- voters will think very, very this threat now is,” Mr. Fallon
have predicted that the pro-EU sions, all sorts of public ser- hard about the real risks to our said. “This is exactly the wrong
camp would see a late rally as vices, including defense would security by voting to leave.” time for Britain to be backing
undecided voters support the be at risk,” Mr. Fallon said. Mr. Fallon said the U.K. away.”
status quo option. “That really matters here. This wants NATO and the EU to Mr. Fallon was in Brussels
Mr. Corbyn has kept a low is a very dangerous moment.” work together more closely on for a meeting of NATO defense
profile during the campaign in Supporters of the ‘Leave’ threats to members. ministers.
comparison with Mr. Cameron, campaign in the U.K. have dis- The prospect of “one of the —Julian E. Barnes Jens Stoltenberg addressed NATO defense ministers on Tuesday.
EU Envoy to Turkey Abruptly Steps Down Italy Extends

Detention
The European Union’s top illegal migrants crossing to Eu- lifting visas for Turks hobbling boring Syria in 2011. other EU official in Brussels
envoy to Turkey resigned, EU rope through Turkey in ex- efforts to forge closer ties and The EU has in response ac- said of Mr. Haber’s removal.
officials said on Tuesday, end-
ing a short, rocky ride as Eu-
change for visa-free travel to
the bloc for Turks, the resump-
fueling mutual distrust.
Mr. Erdogan has chastised
celerated its efforts, pledging
on May 12 to provide €1 billion
Another issue has been visa
liberalization for Turkey,
For Eritrean
ropean and Turkish officials tion of its long-stalled accession the bloc for failing to release in aid by the end of July. which the European Commis- BY MANUELA MESCO
grapple with myriad chal- talks to join the EU, and €6 bil- funds quickly enough, saying “There certainly wasn’t a sion recommended on May 4 AND GIOVANNI LEGORANO
lenges threatening a deal cred- lion ($6.7 billion) in financial aid Turkey has spent some $10 grip” at the EU delegation in on condition that Ankara ful-
ited for curbing the refugee for some three million mostly billion on refugees since the Ankara over the projects and fills five outstanding criteria, A judge in Palermo, Sicily,
influx to Europe. Syrian refugees in Turkey. onset of the conflict in neigh- disbursements being run, an- led by overhauls to sweeping ruled Tuesday that a man ex-
“Turkey’s a key partner, it’s Turkish counterterrorism laws. tradited to Italy from Sudan
By Emre Peker in a candidate country. We have Turkish officials have been last week and suspected of
Istanbul and Laurence re-energized our relationship. enraged by the EU’s demand, people-smuggling must stay in
Norman in Brussels Contacts are ongoing on all which has already delayed jail, the man’s lawyer said.
levels and work continues,” visa-free travel and is strain- Authorities have said the
Ambassador Hansjörg Haber, Ms. Kocijancic said. ing ties, threatening to derail man is Medhanie Yedhego
a German who was appointed Two EU officials in Brussels the broader migration deal. On Mered, an Eritrean citizen sus-
to Ankara last Aug. 31, has re- said there was dissatisfaction Tuesday, Turkish Prime Minis- pected of heading a people-
signed over issues “having to with Mr. Haber’s performance, ter Binali Yildirim said Brus- smuggling ring stretching
do with Turkey” and not for which grew sharper after he sels created a last-minute ob- from central Africa to Libya
personal reasons, an EU official drew Ankara’s ire with provoca- stacle by demanding changes and Europe. He was extradited
in the Turkish capital said. tive comments about Turkish to antiterror measures. to Italy after being arrested in
Mr. Haber will leave his President Recep Tayyip Erdo- “We are struggling for the Khartoum, Sudan, on May 24.
post on Aug. 1 and Brussels gan and the migration deal. One unity, togetherness and perpe- But the man claims he is
will “swiftly appoint” a new EU official said the decision to tuity of our country, under Medhanie Tesfamariam Berhe,
ADEM ALTAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
ambassador to Turkey, said replace Mr. Haber was made in these circumstances revision an Eritrean refugee. He denies
Maja Kocijancic, spokeswoman Brussels in recent weeks. to the counterterrorism law is any wrongdoing or knowing
for EU foreign-policy chief “He became persona non out of the question from our Mr. Mered, his lawyer, Michele
Federica Mogherini. grata very soon,” said one EU perspective—even if the cost Calantropo, said.
The move comes as a mid- official in Brussels. “He has is visa liberalization,” Mr. The judge, however, ruled
March agreement between never gotten a real entry into Yildirim told his ruling party there was insufficient evi-
Turkey and the EU is under in- the Turkish administration.” lawmakers in Parliament. dence that the man in custody
creasing strain, with Turkish Mr. Haber’s office in Ankara The commission will pres- isn’t Mr. Mered. He was or-
officials regularly slamming directed a request for comment ent its latest report on Tur- dered to remain in custody
the bloc for failing to deliver to Ms. Kocijancic in Brussels. key’s visa liberalization on pending further investigation.
on its promises in exchange Turkish and EU officials Wednesday, and is expected to In a memo to the court,
for Turkish help in halting Eu- have been at loggerheads say Ankara has made some prosecutors said the man may
rope’s worst refuge crisis since since clinching their deal, with progress amid positive discus- not be Mr. Mered. However,
World War I. differences over cash dis- sions, one of the EU officials they said they believe he was
Turkey agreed to take back bursements and criteria for Hansjörg Haber’s remarks about Turkey’s president drew Ankara’s ire. in Brussels said. involved in people-smuggling.
A4 | Wednesday, June 15, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.
WORLD NEWS
Yemen City Resets After al Qaeda Retreats

Al Mukalla residents say life was both stable and brutal under Islamist extremists before yearlong rule ended
Whether residents in Al coalition supports Mr. Hadi. Ameer Ba Awdan, a jour-
Mukalla, Yemen, needed gen- Residents said public ser- nalist, was arrested after par-
erators to keep the lights on vices including electricity, ticipating in a demonstration
or shelter from an impend- water and waste disposal against terrorism. He lan-
ing cyclone, al Qaeda was of- were largely managed to their guished in an AQAP jail cell
ten ready to help. satisfaction under AQAP’s by himself for seven months.
governance. Many said civil Shortly before the Saudi-
By Saleh al-Batati in Al justice was meted out fairly. led coalition entered the city,
Mukalla, Yemen, and Led by men including Mr. Awdan was taken with
Asa Fitch in Dubai Khalid Batarfi, a senior com- other prisoners to a beach.
mander freed from Al Mu- Some were executed; he was
But life in this port city kalla’s main prison when released, along with some
STRINGER/AGENCE FRANCE-PRESSE/GETTY IMAGES

under the yearlong rule of al AQAP took over, the group others. Mr. Awdan doesn’t
Qaeda in the Arabian Penin- imposed its strict version of know why.
sula was also brutal: The mili- Islamic law. “I was numb,” he said.
tants detained and questioned AQAP had money to Life for women under
many with little justification, spend, too, in the form of AQAP was particularly harsh.
and executed some deemed port and oil revenue and an “They were too tough
unsympathetic to their views, estimated $100 million it with their extreme ideas,”
some residents said. looted from the city’s cen- Ms. Sawmahi said.
Just over a month after tral-bank branch. There has been little indi-
AQAP fled an advancing “They managed to oper- cation that AQAP is trying to
Saudi-led military offensive, ate the seaport and buy gen- move back into the port city,
a picture is emerging of how erators, to buy gas and die- but Yemeni officials said this
the extremist group gov- sel,” said Ashraf al-Obthani, month that they thwarted a
erned what had been its Yemeni soldiers stood guard in Al Mukalla after a suicide attack in May, around the time AQAP left. a 30-year-old lawyer born planned bombing by the ex-
crown jewel. and raised in the city. tremists.
Unlike Islamic State, most populous territory al remembers how when high government when we had The extremist group cast “Defeating AQAP will take
AQAP, an affiliate of al Qaeda Qaeda had ever held. winds lashed the southern floods in 2008.” its retreat as a gesture to a lot more than the deploy-
that claimed responsibility Yet some residents here coast in November, al Qaeda AQAP moved in on Al Mu- save the city from more ment of troops,” said Kather-
for the Charlie Hebdo shoot- said AQAP provided a level sprang into action. kalla in April 2015 amid a fighting. But many residents ine Zimmerman, an analyst at
ings in Paris last year, hasn’t of stability and engagement “They took all measures power vacuum created by a said they were happy to see the Washington-based Ameri-
made territorial control its that was lacking under previ- necessary to protect peo- now 14-month-old civil war AQAP go. can Enterprise Institute. “It’s
focus in the seven years ous governments, an achieve- ple—they even evicted peo- between Shiite Houthi rebels “We were excited when going to take a concerted ef-
since its founding in Yemen. ment that will help it main- ple at risk, providing them and the internationally rec- they decided to leave the fort to meet the expectations
This city of 300,000, sitting tain loyal allegiances on the with temporary housing,” he ognized government of Pres- city,” said Najwa al-Sawmahi, of the people for what ser-
at the foot of a chain of ground despite its retreat. said. “These measures ident Abed Rabbo Mansour who teaches English at a vices the government should
coastal mountains, was the Mohammad al-Katheeri weren’t taken by the former Hadi. The Saudi-led military public school. be providing.”
EgyptAir Brazil Court Strips Ex-Leader’s Legal Privilege

Findings BY ROGERIO JELMAYER
AND LUCIANA MAGALHAES
mer president denies wrong-
doing. His lawyer declined to
hands of the Supreme Court
until Monday’s ruling by Mr.
Point Away SÃO PAULO—Brazil’s Su-

preme Court dealt a major le-
comment on Mr. Zavascki’s
ruling.
The ex-president is under
Zavascki, who is in charge of
all high-court matters involv-
ing the Petrobras probe.
From Blast gal setback to former Presi-

dent Luiz Inácio Lula da Silva,
referring a corruption investi-
investigation for allegedly
profiting from a yearslong
scheme to divert billions from
Mr. Zavascki said Mr. da
Silva is no longer a sitting pol-
itician and thus can be investi-
Egyptian officials probing gation involving him back to a the oil giant. Judge Sergio gated by Mr. Moro’s court.
the crash of EgyptAir Flight crusading lower-court judge Moro, who has directed the Monday’s ruling puts the
804 said Monday the plane who has jailed many powerful probe surrounding the firm investigation of Mr. da Silva
veered off course before defendants in the nation’s from the city of Curitiba, has and his alleged dealings with
plunging into the sea, suggest- largest-ever graft scandal. been investigating claims that Petrobras back under the au-
VICTOR MORIYAMA/GETTY IMAGES
ing that an abrupt in-flight ex- The decision late Monday Mr. da Silva enjoyed the use of thority of Mr. Moro, who has
plosion didn’t bring down the by Justice Teori Zavascki ef- a luxury property provided to been relentless in pursuing
aircraft. fectively strips Mr. da Silva of him by construction firms that powerful suspects. He and a
privileged legal protection re- won lucrative contracts from team of prosecutors from Cu-
By Dahlia Kholaif served for high-ranking offi- Petrobras. ritiba have arrested more than
in Cairo, Robert Wall cials. The move increases the Mr. Moro was forced to re- 100 people in the probe, which
in London and Andy likelihood that Mr. da Silva, linquish control of the probe has rocked the highest levels
Pasztor in Los Angeles still Brazil’s most towering po- of the ex-president to the Su- of Brazilian business and poli-
litical figure, could be arrested preme Court in March after tics. Several influential defen-
The Airbus Group SE A320 in connection with a block- then-President Dilma Rousseff Former President Luiz Inácio Lula da Silva during a protest dants have been sentenced to
plane bound for Cairo from buster corruption probe cen- appointed Mr. da Silva to her against acting President Michel Temer on Friday in São Paulo. long prison terms in the mas-
Paris deviated from its course tered on state oil firm Petró- cabinet as chief of staff. sive bid-rigging-and-bribery
while flying at 37,000 feet, leo Brasileiro SA, or High-ranking public offi- bring defendants to justice. since been forced to step down scandal, including Marcelo
first turning left before rolling Petrobras. cials in Brazil can only be Legal challenges prevented from office to face an im- Odebrecht, the former chief
to the right and completing a A spokesman for Mr. da tried by the Supreme Court, Mr. da Silva from ever taking peachment trial. But Mr. da executive of construction giant
full circle, investigators said in Silva on Tuesday said the for- which can often take years to the post, and Ms. Rousseff has Silva’s case remained in the Odebrecht SA.
their latest update into the
May 19 crash that killed all 66
people onboard.
The finding confirms state-
ments initially made by Greek ATTACK said. “He added that he was
responding to a statement
from the Emir urging: ‘Kill in-
cluded politicians, journalists
and celebrities, Mr. Molins
said.
challenge that France faces as
it seeks to foil terror plots
while hosting the Euro 2016
Russia Frees
officials about the last seconds
of flight but initially rejected Continued from Page One
fidels in their homes, with
their families,’” Mr. Molins
During an hourslong stand-
off with police, Mr. Abballa
soccer tournament. Authorities
have rounded up scores of rad-
Two Jailed
by Egyptian authorities, who in the police department of said. shared a video on Facebook in icals on watch lists as part of
suggested contact was lost
more abruptly. Investigators
another nearby suburb.
The killings are the latest to
French officials described a
gruesome chain of events on
which he says he killed the
woman and questions what to
state-of-emergency measures
enacted in the wake of the Nov.
Ukrainians
have spent the past few days stoke fears that Islamic State, Monday night. Mr. Abballa do with the couple’s son, a 13 terror attacks and extended BY LAURA MILLS
going over all available radar using a flood of internet pro- stabbed Mr. Salvaing repeat- French police official said. The through the tournament.
information to reconcile the paganda, has become more ef- edly outside the couple’s three-year-old was rescued French Interior Minister MOSCOW—Moscow freed
conflicting theses. fective at provoking attacks by house in Magnanville, a north- unharmed but in a state of Bernard Cazeneuve said after two Ukrainian prisoners Tues-
The Egyptian finding does people in Europe and the U.S. western suburb of Paris, as the shock, the prosecutor added. an emergency meeting at the day, letting them return to
little to explain why the plane who have only tenuous links to police captain was coming As it did after the Orlando Élysée Palace on Tuesday that Kiev weeks after a high-profile
crashed into the Mediterra- the group’s command center in home. Leaving him to die out- shooting, Islamic State swiftly more than 100 people had prisoner exchange.
nean. No cause has been ruled Syria. It comes days after a side, Mr. Abballa entered the claimed responsibility for Mr. been arrested this year in The Kremlin said it had or-
out, Egyptian officials have man who authorities believe house and took Ms. Schneider Abballa’s attack. The Amaq France for terrorism-linked of- dered the release of Gennady
said, including potential hos- was inspired to act—but not and their 3-year-old son hos- news agency, a news outlet af- fenses. Afanasiev and Yury Solosh-
tile action. The radar findings directed—by the extremist tage. filiated with the extremist But officials say police have enko weeks after the release
suggest, though, that there group killed 49 people at a gay When police eventually group, cited an unnamed also allowed other radicals to of Lt. Nadiya Savchenko, a
wasn’t a sudden explosion that nightclub in Orlando, Fla., the raided the house, Ms. Schnei- source as saying that one of remain free so authorities can Ukrainian military pilot in
tore the plane apart midair. worse mass shooting in U.S. der was dead. “It is unspeak- the extremist group’s fighters eavesdrop on their communi- Russian detention for more
The Airbus A320 broadcast history. able,” said Magnanville Mayor carried out the attack. cations and gather intelligence than two years. She was ex-
a number of fault messages While there is no evidence Michel Lebouc. “They are a Later in the day, Islamic about potential attacks. changed for two men Kiev
before all contact was lost, in- Mr. Abballa ever went to well-respected family.” State circulated Mr. Abballa’s Prosecutors said Mr. Ab- says were active-duty Russian
dicating possible smoke in the Syria, he told police during the French police shot dead Mr. video over jihadist social net- balla’s phone was being wire- soldiers detained in the east.
nose of the plane, including a standoff negotiations Monday Abballa while the attacker was works—but with the section tapped as part of a probe Ukrainian President Petro
critical electronic-equipment evening that he had pledged still holding the young son removed in which he shows opened in February into a net- Poroshenko welcomed the two
hub beneath the cockpit. The allegiance to Islamic State hostage. Inside the couple’s the couple’s son and debates work of extremists that was men home on his official Twit-
messages alone haven’t proved leader Abu Bakr al-Baghdadi home, they discovered a target the boy’s fate. sending people to Syria. ter account.
sufficient to determine a likely three weeks earlier, Mr. Molins list of individuals that in- The killings highlight the “These wiretaps had not pro- Mr. Afanasiev was sen-
cause for the crash, investiga- vided the least bit of evidence tenced to seven years in
tors have said. That has added to detect the preparation or prison in 2014 on charges of
urgency to recovering the carrying out of a violent act,” terrorism. Mr. Soloshenko was
plane’s black boxes that store said Mr. Molins. accused by Russia’s Federal
technical data as well as con- A French police spokesman Security Service of attempting
versations in the cockpit. said Mr. Abballa presented a to buy parts of an antiaircraft
Egypt also said it has in- threat that is particularly dif- missile system, and was sen-
vited the U.S. National Trans- ficult to stop: a terrorist who tenced to six years in prison in
portation Safety Board to par- organizes a plot without the 2015. The Ukrainian govern-
ticipate in the investigation. involvement of an extensive ment has said the detentions
U.S. crash investigators have network of accomplices. “They were illegal and that the
been eager to assist in the can radicalize themselves in charges faced by the two were
crash probe. A technical ex- their own corner,” said police politically motivated.
pert from the maker of the spokesman Jérôme Bonet after Neither the Russian nor
plane’s black boxes, Honeywell Monday’s killing. “They don’t Ukrainian governments said
International Inc., also has need technical means or spec- whether Ukraine had released
been invited to join, Egypt tacular weapons to act.” any prisoners in exchange for
said. French air-accident in- Mr. Abballa, who lived sev- the two men.
vestigators have been assist- eral miles from the victims, Viktor Medvedchuk, a
ing the probe almost from the was convicted in 2013 of being Ukrainian politician who has
start. The cockpit voice and a member of a French jihadist acted as an intermediary with
THIBAULT CAMUS/ASSOCIATED PRESS
flight-data recorder typically group that aimed to send the Russian side in talks to re-
provide the best clues to why fighters to join al Qaeda in solve the conflict in eastern
an aircraft crashed. Pakistan and Afghanistan. He Ukraine, told the news agency
Investigators are still trying served two years in jail, where Interfax on Tuesday the two
to pinpoint the exact location he was known for attempting men had been exchanged for
of the Airbus A320’s data-stor- to preach Islam to other pris- two Ukrainian journalists. Rus-
age units almost two weeks af- oners, Mr. Molins said. sian agencies said the journal-
ter a French vessel first de- —Sam Schechner ists had been charged with
tected a signal from a beacon and Nick Kostov fostering separatist views by
belonging to one of the boxes. French police officers at the crime scene Tuesday, a day after the attack in Magnanville, near Paris. contributed to this article. the Ukrainian authorities.
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I N PA R T N E R S H I P W I T H
WS J. CUS TO M S T U D I OS IS A U N I T O F T H E WA L L S T R EE T J O U R N A L A DV ERT I S I N G D EPA RT M EN T.

T H E WA L L S T R EE T J O U R N A L N E WS O RG A N IZ AT I O N WA S N OT I N VO LV ED I N T H E C R E AT I O N O F T H I S CO N T EN T.
WORLD NEWS
U.K. Vote Looms Over Bank of Japan

With Abenomics in expect it next month. rency on Tuesday traded near rate increase would likely help
trouble and yen rising,
Etsuro Honda, an aide to its strongest level against the Sinking Feeling the BOJ by strengthening the
Mr. Abe, has called on BOJ U.S. dollar since October 2014, By any measure, prices are turning away from the Bank of Japan's dollar against the yen, though
BOJ policy chiefs face Gov. Haruhiko Kuroda to com- as fears that the U.K. could 2% inflation goal. a weak labor-market report
plete a “version upgrade” of vote to leave the EU sent in- has cast doubt on the likeli-
a difficult decision Abenomics this week by rais- vestors searching for haven Consumer price indexes, changes from a year earlier hood of one in the short term.
ing the BOJ’s asset-purchase assets. Against the euro, the “Additional easing [by the
BOJ’s goal
BY TAKASHI NAKAMICHI target by 25% to 100 trillion yen has regained all the 2.0% BOJ] isn’t urgently needed in
yen ($941.1 billion) a year. ground it lost since April 2013, the current situation, although
TOKYO—The Bank of Mr. Honda warned against when the BOJ began its quan- 1.5 it is possible to find enough
Japan faces pressure to step moving the interest rate the titative-easing program under ‘Core core’ reasons to justify” it this
up stimulus measures this BOJ sets on some bank re- Mr. Kuroda. 1.0 week, one of the people said
Excludes fresh food
week as sagging inflation and serves further into negative In addition, yields on Japa- and energy of the BOJ staff’s thinking.
a rising yen threaten efforts to territory, citing a public back- nese government bonds have 0.5 That stance marks a depar-
10% trimmed
revive the economy, but wor- lash against the policy. hit record lows. The bench- Excludes most ture from Mr. Kuroda’s em-
0
ries over a possible British The central bank’s asset- mark 10-year traded at minus volatile items phasis that the BOJ should act
exit from the European Union purchase program and nega- 0.17% Tuesday, while the 20- “without hesitation” and do
–0.5 Core
complicate its decision. tive rate are meant to push in- year was at 0.155%. Excludes fresh food whatever is necessary to erad-
The central bank’s meeting terest rates lower across the Softer inflation is stoking –1.0 icate the nation’s “deflationary
comes as Abenomics, Prime board to help stimulate invest- renewed concern at the BOJ, mind-set.”
Minister Shinzo Abe’s signa- ment and consumption and according to people close to 2012 ’13 ’14 ’15 ’16 Mr. Kuroda can’t afford to
ture economic program, has generate price increases that the central bank. One measure Note: All measures exclude effects of 2014 sales-tax increase.
be seen as becoming overly
run into trouble. The economy will fuel economic growth. shows prices falling by 0.3% Sources: Bank of Japan; Ministry of Internal Affairs cautious. If he sits idly by for
has swung between modest On Monday, Fitch Ratings from a year earlier in both and Communications (Core CPI) THE WALL STREET JOURNAL. the entire summer, “it would
growth and contractions in re- said Abenomics hadn’t con- March and April, the fastest mean a ‘version downgrade’”
cent quarters, and the BOJ’s vincingly broken Japan out of drops since the early days of next week on whether to leave tional policy action the bank of Abenomics, said Toshihiro
hard-won gains in its battle deflation, a cycle of falling Abenomics three years ago. the EU, according to people would take this week by driv- Nagahama, chief economist at
with deflation are evaporat- prices, spending and invest- The BOJ’s preferred infla- close to the central bank. A ing the yen sharply higher, the Dai-ichi Life Research Insti-
ing. ment that suppresses growth. tion gauge, which excludes vote to leave would likely jolt people said. This would leave tute.
Expectations are high that A weaker yen has been a lower energy prices, is also global markets, triggering fur- the BOJ with fewer options to Mr. Kuroda is a fan of mis-
the BOJ will act, if not at the key element of Abenomics. sinking. In April it stood at ther buying of the yen and respond, they said. direction and shocking the
end of its two-day meeting The currency’s earlier sharp 0.9%, less than half the bank’s complicating the BOJ’s unspo- They would also like to markets. Economists are pre-
Thursday then at its next pol- decline raised corporate prof- 2% target. Bank officials ex- ken task of weakening the cur- wait until after the U.S. Fed- paring for every possibility.
icy meeting in July. A quarter its in Japan, but the expected pect the number to keep drop- rency. eral Reserve policy meetings Goldman Sachs chief Japan
of 38 economists recently sur- wage increases ended up be- ping in the coming months. Those board members scheduled for this week and economist Naohiko Baba re-
veyed by the Japan Center ing minimal. Some BOJ board members worry the market turmoil that next month before deciding on cently wrote to clients that he
for Economic Research, a The yen’s recent resurgence who generally support aggres- is likely to result from a further action, according to expects no action this week
think tank, expect fresh mone- has added more pressure on sive easing believe it should “leave” vote would more than people familiar with the cen- but he is on the lookout for a
tary easing this week, and 50% the BOJ. The Japanese cur- wait until after the U.K. votes nullify the effects of any addi- tral bank’s thinking. A U.S. “possible surprise.”
Asean Takes Dig at China, Then Backpedals Statement

BY CHUN HAN WONG trust and confidence, in- dispute at Tuesday’s meeting.
creased tensions and which “The differences between
BEIJING—In an unusual may have the potential to un- China and the Philippines are
show of unity against Beijing, dermine peace, security and well-known to all, but this
foreign ministers from South- stability in the South China isn’t an issue between China
east Asia jointly voiced “seri- Sea.” and Asean,” Mr. Wang said.
ous concern” over rising ten- The Asean foreign ministers “Cooperation between China
ARMED FORCES OF THE PHILIPPINES/EUROPEAN PRESSPHOTO AGENCY
sions in the South China Sea— didn’t explicitly blame China and Asean is far greater than
only to say hours later that for stoking tensions or refer any specific discord, including
they would amend their state- directly to The Hague tribunal, the South China Sea dispute.”
ment. which is expected to rule China has dismissed The
Their comments came amid within weeks on an arbitration Hague tribunal as illegitimate
China’s diplomatic blitz to dis- case filed by the Philippines in and boycotted its proceedings.
credit a coming international 2013 to challenge Beijing’s In recent weeks, Beijing has
legal ruling on territorial sweeping maritime claims. stepped up efforts to discredit
claims that is expected to de- Instead they reiterated the tribunal, for instance, by
liver a setback for Beijing. their opposition to “militariza- urging friendly countries to
In a Tuesday statement is- tion” and land reclamation ef- support its position on the
sued after a meeting with forts in the South China Sea, South China Sea, where Chi-
China’s foreign minister, top in reference to Beijing’s efforts nese claims overlap those
diplomats from the Associa- over the past two years to from five other governments,
tion of Southeast Asian Na- construct artificial islands including the Philippines.
tions urged respect for inter- with facilities that could serve Tuesday’s statement didn’t
national law in resolving military purposes. The Asean stray far from Asean’s past
disputes, a thinly veiled swipe ministers also called for com- rhetoric, which also urged
at Beijing’s refusal to accept An aerial view of China’s construction work on Johnson Reef in the disputed Spratly Islands. pliance with international law, peaceful dialogue and avoided
the ruling from a United Na- including the U.N. Convention directly apportioning blame to
tions-backed tribunal in The that has often been divided in day evening the bloc hadn’t is- powerful economic partner. on the Law of the Sea, under China. “The statement is still a
Hague. its response to China’s grow- sued an amended statement. Such discord boiled over in which The Hague tribunal was product of a least-common-de-
In recent weeks, the U.S. ing assertiveness in regional Asean, which makes deci- 2012 when a meeting of Asean set up. nominator approach, and is
and other governments have maritime disputes. sions by consensus, in the past foreign ministers failed to Chinese Foreign Minister careful to allow for multiple
criticized Beijing for what Hours after the statement has struggled to find a com- yield a joint communiqué. Wang Yi, speaking at a tele- interpretations,” said Aaron
they term as disregard for in- was issued, Malaysia’s foreign mon voice on the South China In the original statement, vised news briefing, didn’t re- Connelly, a Southeast Asia
ternational maritime law. The ministry said Asean was re- Sea disputes. Some members the Asean ministers expressed fer directly to the arbitration specialist at the Lowy Institute
Asean ministers’ comments tracting the document to make advocate a tougher response their “serious concerns over case, but said that China and for International Policy.
conveyed an unusually strong some changes. No explanation against Beijing, while others recent and ongoing develop- the Philippines explained their —Ben Otto in Jakarta
tone for a 10-member bloc was given, and as of late Tues- are reluctant to antagonize a ments, which have eroded respective positions on the contributed to this article.
meanwhile, said the disappear- EUROZONE March, a move that many Ger- average households because the law to loosen labor rules, which
World ances have threatened Hong
Kong’s political autonomy.
Italians Hit Hardest man officials worry hurts the
nation’s savers.
drop in interest earnings roughly
matches lower interest pay-
is being debated in the Senate.
Street protests are planned
Watch —Ned Levin By Ultralow Rates
Italian households have been
But in a research note pub-
lished on Tuesday, the ECB said
ments on debt.
—Tom Fairless
across France, rail workers and
taxi drivers are on strike and the
BAHRAIN squeezed much harder by the that since late 2008, the aver- Eiffel Tower was closed Tuesday
European Central Bank’s ultralow age household in Italy has seen FRANCE because the operators said they
Shiite Opposition interest rates than their counter- its interest earnings fall twice as couldn’t guarantee public safety.
Party Suspended parts in Germany or France, the much as its interest payments
Violence Erupts at In a separate protest, Air
HONG KONG Bahrain suspended the king- ECB said Tuesday, in new re- on debt. Labor-Law Protests France pilots are striking to de-
dom’s largest Shiite political search that appears to escalate The reason, the central bank Protesters in Paris threw pro- mand better working conditions.
Bookseller Asks group and froze its assets on a dispute with Berlin over the said, is that Italian households jectiles at police officers, who re- About 20 % of all Air France’s
Police to Drop Probe Tuesday as part of a widening ECB’s easy-money policies. hold a relatively large amount of sponded with tear gas, amid flights were canceled.
A local bookseller who van- crackdown on activists and dis- Senior German politicians interest-bearing assets and are demonstrations Tuesday by tens —Associated Press
ished last year along with four sent five years after the coun- have been openly voicing their relatively less indebted than of thousands of people opposed
of his colleagues, sparking pro- try’s Arab Spring protests. frustration with the Frankfurt- their eurozone peers. to a contested labor reform. ITALY
tests over the perceived erosion The Al-Wefaq opposition based central bank, particularly In Germany and France, lower Seven unions and student or-
of freedom of speech in this city, group has been suspended be- since it ramped up its €1.8 tril- rates have had a minimal effect ganizations had called demon-
Berlusconi Surgery
returned to Hong Kong on Tues- fore as Bahrain has been em- lion ($2.03 trillion) stimulus in on the net interest income of strations against the proposed ‘Went as Planned’
day with a request for police: broiled in turmoil over the pro- Former Italian Premier Silvio
Drop the investigation into his tests and lingering unrest that Berlusconi’s open heart surgery
disappearance. followed in the years since the has gone as planned, a spokes-
Lam Wing Kee met with demonstrations. However, Bah- woman for the hospital where
Hong Kong police, told them he rain’s Sunni-ruled government in- he was treated said Tuesday.
didn’t require any assistance, creasingly has targeted activists. The three-time premier had
and declined to disclose other The Justice and Islamic Af- surgery to replace his aortic
details, according to a police fairs Ministry said a court de- valve with a new one, after he
statement. He couldn’t be cided to suspend Al-Wefaq to suffered a “cardiac deficiency”
reached for comment Tuesday. “safeguard the security of the earlier this month.
Mr. Lam’s request was identi- kingdom.” “Everything went as planned,”
cal to those of three colleagues The sudden court case came the spokeswoman said. A person
who returned to Hong Kong in a day after authorities detained close to the mogul said that the
March and also asked police to Nabeel Rajab, a prominent activ- procedure went well.
stop their investigations. A fifth ist and the president of the Bah- Mr. Berlusconi was hospital-
colleague, Gui Minhai, remains in rain Center for Human Rights. ized in Milan at the San Raffaele
Chinese police custody, though Zainab al-Khawaja, another hospital on June 5 after return-
he has yet to be formally prominent activist, fled to Den- ing from Rome, where the 79-
charged with a crime. mark in recent days over fears year-old voted in the city’s local
HOTLI SIMANJUNTAK/EUROPEAN PRESSPHOTO AGENCY
Mr. Lam and colleagues Lui of being imprisoned again. elections.

Por and Cheung Chi Ping van- Bahrain’s 2011 demonstra- The surgery lasted about four
ished in October while in main- tions saw the island’s majority hours, as family and close
land China. Mr. Gui went missing Shiite population and others de- friends waited for the doctors’
from his vacation home in Thai- mand more political freedoms response and a small crowd of
land the same month, and an- from its Sunni rulers. The pro- supporters camped outside the
other colleague, Lee Bo, disap- tests were crushed by the gov- hospital.
peared from Hong Kong in ernment with the help of troops Mr. Berlusconi will be held in
December. The five were all affil- from Saudi Arabia and the intensive care for a couple of
iated with the Causeway Bay United Arab Emirates. days, the hospital spokeswoman
Books store and Mighty Current, Since then, the island has added.
its related publisher, which pro- faced low-level unrest. Other Last week, Mr. Berlusconi’s
duced works of political gossip. prominent opposition figures and personal doctor Alberto Zangrillo
The men’s disappearance has human-rights activists remain said that tests found a defective
had a chilling effect on Hong imprisoned. Some have been IN LIMBO: Sri Lankan migrants attempting to sail to Australia were stranded in Indonesia after valve that, if untreated, could
Kong’s media scene, publishers stripped of their citizenship and their boat’s engine failed. Immigration officials said the migrants were refusing to leave Indonesian have proved fatal.
have said. Some politicians, deported. —Associated Press waters unless they were given around 7 metric tons of fuel for their onward journey to Australia. —Manuela Mesco
U.S. NEWS
Ryan Rejects Muslim Ban Investigators Probe
Republican House
speaker reiterates
people and injured dozens of
others in the worst mass
If Shooter Used
shooting in U.S. history.
opposition to call by
his party’s candidate
Senate Minority Leader
Harry Reid (D., Nev.) said on
the Senate floor Tuesday:
Gay Dating App
“It’s incomprehensible that BY TRIPP MICKLE had attended the nightclub be-
BY KRISTINA PETERSON any presidential nominee fore the attack, the father said
would foster and promote An Orlando man who regu- that might have been to case
WA S H I N G T O N — H o u s e systematic bigotry, as Trump larly attends Pulse nightclub it.
Speaker Paul Ryan on Tuesday often does.” Mr. Reid added said Tuesday he saw a photo- Grindr surfaces images of
rejected presumptive Republi- that “it’s reprehensible and graph of the man he believes members in geographic prox-
can presidential nominee Don- un-American for the nominee to be Omar Mateen on the gay imity to each other. Because
ald Trump’s response to the of any major party or any social-media app Grindr about Mr. Scott works about 2 miles
Orlando, Fla., shooting, calling party to declare millions of a week before the deadliest from Pulse, he said he often
instead for an alliance with Americans guilty until proven mass shooting in U.S. history. goes on the app during his
moderate Muslims to combat innocent based on their reli- DeAngelo Scott, who man- break to chat with people or
militant Islamic terrorists. gion.” ages a cellphone store near the look for faces he recognizes
Mr. Ryan reiterated his op- Democrats have repeatedly club, said he was on Grindr from Pulse.
position to Mr. Trump’s re- called on Republicans to re- during the day and scrolled Mr. Scott said he couldn’t
peated calls for banning Mus- scind their endorsements of past a picture of the man he recall if Mr. Mateen was online
lims from entering the U.S. Mr. Trump as GOP nominee. now believes was Mr. Mateen. or not when he scrolled past
and drew a clear delineation J. SCOTT APPLEWHITE/ASSOCIATED PRESS Mr. Ryan on Tuesday also In the photograph, he said the his photo. But he said, “When
between peaceful Muslims and acknowledged that the Or- man was standing in front of a I first saw it on the news, I had
more militant groups, includ- lando shooter, identified by mirror, holding his phone. His this odd feeling I’d seen him
ing Islamic State terrorists. officials as Omar S. Mateen, hair was short and wavy and before.”
“There’s a really important targeted the gay and lesbian his shirt was white, said Mr. Authorities say Mr. Mateen
distinction that every Ameri- community in Sunday’s mas- Scott, 30 years old. killed 49 people and injured
can needs to keep in mind: sacre. While Democrats have “People that take a picture 53, before being fatally shot by
This is a war with radical Is- recoiled at the violence aimed like that stand out,” Mr. Scott police. The 29-year-old U.S.
lam—it’s not a war with Is- at the gay, lesbian and trans- said. He said that the shooter citizen had called 911 during
lam. Muslims are our part- gender community, very few looked familiar in images after the attack, pledged allegiance
ners,” Mr. Ryan told reporters Republicans have mentioned the attack, and he is now con- to Islamic State and referenced
Tuesday. “They’re among our the orientation of the club vinced Mr. Mateen was on the brothers behind the
best allies, among our best Paul Ryan talks about Orlando, Fla., terror attack on Tuesday. where the shooting took Grindr, especially after friends 2013 Boston Marathon bomb-
resources in this fight against place. at Pulse said they saw Mr. Ma- ing, according to officials.
radical Islamic terrorism.” “I do not think a Muslim with House Republicans on “Let’s be clear: This was teen at the club. Mr. Scott was at the
Mr. Ryan’s comments di- ban is in our country’s inter- July 7. another act of war against club Sunday morning but left
verged sharply from those of est. I do not think it is reflec- Mr. Trump also suggested America by radical Islam,” before the shooting. He said he
Mr. Trump, who on Monday tive of our principles—not on Monday that President Ba- Mr. Ryan told reporters. “At
A regular at the and his friends have been try-
appeared to broaden his just as a party, but as a coun- rack Obama might be sympa- the same time, let’s also be nightclub says a ing to piece together details of
pledge to ban Muslims from try,” Mr. Ryan said. thetic to the radical Islamists clear members of the LGBT that night ever since. The one
entering the country by in- Mr. Ryan deliberated for who inspired the gunman at community were the targets.
photo on Grindr thing he said he couldn’t un-
cluding immigrants from any weeks before endorsing Mr. Pulse, the gay nightclub in They were simply attacked resembled Mateen. derstand was how Mr. Mateen
country “with a proven his- Trump as the party’s nominee Orlando where Sunday’s for who they are. This is an got a weapon into the club.
tory of terrorism against the earlier this month. However, shooting occurred. ideology that rejects who we “If he came in with a bag,
U.S., Europe or our allies.” he has criticized several of On Sunday, Mr. Trump said are as a country: open, toler- A Grindr spokesman de- the [security] girls at the door
Mr. Ryan, a Wisconsin Re- Mr. Trump’s positions and he was receiving congratula- ant, free.” clined to say whether Mr. Ma- would have checked the bag,”
publican, said the U.S. should comments, labeling as “rac- tions “for being right on radi- Mr. Ryan said the House teen had a profile on its app. Mr. Scott said. “If he came in a
tighten its screening process ist” the businessman’s critical Islamic terrorism.” would be escalating its efforts “We will continue to cooperate coat, that would stand out be-
of refugees entering the coun- cism of a federal judge over Democrats excoriated Mr. to combat militant Islamic with the authorities and do cause it’s Florida in the sum-
try, rather than impose a reli- his Mexican heritage. Trump’s remarks in response terrorism, both abroad and in not comment on ongoing in- mertime.” Authorities believe
gious test. Mr. Trump will be meeting to the massacre that killed 49 U.S. citizens. vestigations,” the spokesman Mr. Mateen entered the club
said. from a patio.
Law-enforcement officials —Cameron McWhirter
HACK “The security of our system

is critical to our operation
and to the confidence of the
campaigns and state parties
were operating as criminals or
working on behalf of foreign
governments.
The DNC had relatively
attacked by hackers linked to
China. Staffers responsible for
cybersecurity on both 2012
presidential campaigns re-
said investigators are trying to
determine if the gunman did,
as some witnesses have
claimed, use a gay dating app
and Devlin Barrett
contributed to this article.
Continued from Page One we work with,” she said. weak cybersecurity protections ported frequent, sophisticated or had prior relationships with
immense interest in how future “When we discovered the in- considering the scale of inter- intrusion attempts. gay men that might have been
candidates would treat foreign trusion, we treated this like est from foreign adversaries, a Cybersecurity officials con- part of his motivation for car-
countries, address trade, build the serious incident it is and person familiar with the mat- sider Russian hackers to be rying out the massacre. Agents
their transition teams and reached out to CrowdStrike ter said. Foreign hackers at- among the best in the world, are continuing to examine wit-
make appointments to cabinet- immediately.” tacked U.S. presidential cam- and their breaches often focus nesses’ phones and talk to the
level positions. on diplomatic or political tar- app companies to see if Mr.
“I completely rule out the gets. In 2014, Russian hackers Mateen did use one or more of
possibility of the government
Russian hackers previously penetrated penetrated the State Depart- them, officials said.
or government structures be- State Department, White House systems. ment’s unclassified email sys- Officials said investigators
ing involved in this,” Kremlin tem, and it remained locked in have found evidence he
SEDDIQUE MATEEN
spokesman Dmitry Peskov said on the government server for scouted out the Orlando night-
Tuesday. Director of National Intelli- paigns in 2008 and 2012, so months. They have also club before the attack, and
DNC Chairwoman Debbie gence James Clapper told Con- the DNC should have known it hacked into a White House some patrons said they had
Wasserman Schultz said the gress in May that hackers were would be a target this year as computer server and stolen seen him there previously.
committee moved as quickly as targeting presidential cam- well, this person said. President Barack Obama’s un- Mr. Mateen’s father, Sed-
possible to kick out the intrud- paigns, but wouldn’t provide In 2008, for instance, the classified schedule. dique Mateen, has rejected Suspected nightclub shooter
ers and secure its network af- more information. He wouldn’t email systems of Mr. Obama —Nathan Hodge speculation that his son was Omar Mateen in an undated
ter discovering the breach. specify whether the hackers and his rival John McCain were contributed to this article. gay. Regarding reports that he photo.
U.S. TINY lots for roughly $500 apiece,

and about 20 “tiny housers”
are expected to be moved in
Tiny is relative, too. In
Spur, a tiny dwelling must be
smaller than 900 square feet,
Most tiny houses fall some-
where around 300 square
feet—about one-third the size
of recycled materials. Some
use solar panels or gather
rainwater. The main problem
Watch Continued from Page One
by the end of summer.
The definition of what con-
which many New Yorkers
would consider a spacious
of a swimming pool. The typi-
cal single-family U.S. home is
for tiny house dwellers is that
zoning laws in most cities and
Spur is in tornado country. stitutes a tiny house varies apartment. 2,500 square feet. In Spur, the towns make it very difficult to
“There are some people who widely. The concept falls into Among tiny housers, a 500- smallest house so far mea- legally build such homes.
came here with the belief that three rough categories: tiny square-foot to 1,000-square- sures just 80 square feet. Dave Alsbury, 55, moved to
anything goes,” says Denise houses on wheels, which can foot house is typically called a Tiny homes are more af- Spur three years ago and then
WASHINGTON, D.C. Rosner, 62 years old, who is function like motor homes, tiny “small house,” while a 120- fordable and ecologically came up with the idea of turn-
originally from the Bronx bor- houses on foundations, and square-foot to 500-square-foot friendly, with lower heating ing the town into a tiny house
Panel Upholds Net ough of New York City and was houses made of alternative building is a “tiny house.” and power needs translating mecca. The technology entre-
Neutrality Rules the second tiny house dweller building materials, such as dis- Anything smaller is deemed a into a smaller carbon foot- preneur doesn’t live in a tiny
A panel of federal judges up- to arrive in Spur, where she carded shipping containers. “micro house.” print. Some houses are made house himself.
held the government’s net-neu- lives in a 440-square-foot, tra- Spur’s relaxed building
trality rules Tuesday, handing a ditional-looking home. codes and low prices make it
major victory to the Obama ad- The new rules have divided appealing to people looking
ministration in its efforts to step Spur’s tiny house pioneers. “It for a place to build a tiny
up oversight of cable and tele- was a bait-and-switch,” says house on land they own. The
phone companies that provide Benjamin Garcia, 24, a web recent laying of an ultra-high-
broadband service. consultant. He moved to Spur speed fiber internet cable in
The divided decision by the in November with plans to Spur has proved attractive to
U.S. Court of Appeals for the build a house out of earth. “I those who work online, mean-
District of Columbia Circuit rep- was very forthcoming about ing they don’t need to be
resents a big win for internet what I wanted to build, and farmers or ranch hands to
companies that favor the rules. they said it was fine, and then earn a living in the area.
The rules require internet-ac- they didn’t.” Mr. Alsbury says Spur
cess providers, such as Comcast Mr. Garcia says he felt tar- needed to impose some rules
Corp. or Verizon Communications geted because the temporary, on tiny houses once town offi-
Inc., to treat all content coming 120-square-foot wooden shed he cials started hearing about the
across their networks equally, built while preparing to erect building plans of newcomers
without blocking or slowing the earthen house had a com- like Mr. Garcia. “Benjamin has
competitors or speeding up the post toilet, which is specifically a lot of big ideas, which are all
content of those who pay. barred by the new ordinance. great, but they probably aren’t
—John D. McKinnon After unsuccessfully fight- going to work in a West Texas
and Brent Kendall ing the ordinance, Mr. Garcia town,” Mr. Alsbury says.
and two other people bought a The dust-up hasn’t shaken
MARYLAND 15-acre plot of land 4 miles local interest in the tiny house
outside Spur, called Makerton, movement, and Spur is now
Aquarium Dolphins where there will be no build- working to free up another 40
Will Go to Sanctuary ing restrictions. lots for sale. Each sale puts a
BRANDON THIBODEAUX FOR THE WALL STREET JOURNAL
Eight dolphins that have Spur Mayor Steve Bland dormant property back on the
spent their lives swimming in says the tiny house movement local tax rolls.
tanks will be retired from the has been a lot to take in for “A lot of these towns out
National Aquarium in Baltimore the 107-year-old town, where here are dying. These folks
and enter a seaside sanctuary. the biggest excitement usually coming in are educated, profes-
The plan to move its dolphins comes when the Spur Bulldogs sional and seem like they really
into a protected habitat by the high-school football team have something to bring to the
end of 2020 sets the aquarium squares off against its archri- community. They are like a ray
into uncharted waters. Sea- val, the Paducah Dragons. of sunshine on an otherwise
World, which earlier this year “This is new for us,” Mr. cloudy situation,” says Charlie
ended its orca breeding and Bland says. “We understand as Morris, a retired federal agri-
hinted at similar changes for its it grows, we’ll have to grow culture inspector and Dickens
dolphins someday, has balked at with it—you can’t stay stuck County, Texas, commissioner
similar proposals made by activ- in your ways—but we want who has lived in Spur for about
ists. things to go slowly.” So far, Carol Haefner and her dog on the porch of a ‘tiny house’ in Spur, Texas. The town is trying to lure 40 years. “What we don’t want
—Associated Press Spur has sold 60 abandoned devotees of such homes to reverse a population decline, but new rules have divided its residents. are anarchists or nudists.”
U.S. NEWS
Islam’s Punitive Line on Homosexuality

Many Muslim nations was thrown from the roof of a
have harshly antigay Intolerance two-story building in Iraq. He
survived the fall with critical
Countries where homosexual acts are illegal
laws, forcing people to and in some cases punishable by death
injuries and was subsequently
stoned to death in front of a
live under the radar crowd of spectators, including
Death penalty under Shariah law, and children.
BY KAREN LEIGH implemented nationally or provincially A FG H A N I STA N Regional governments are
IRAQ
AND ASA FITCH Death penalty under Shariah law, SAUDI increasingly balking as LGBT
but not known to be implemented ARABIA activism progresses, said
At least 10 predominantly Same-sex acts illegal Neela Ghoshal, a researcher in
Muslim countries around the SUDAN the LGBT Rights division at
world, some of them close IRAN PA K I STA N Human Rights Watch.
U.S. allies, have laws on the “There seems to be this
books that set a punishment M A U R I TA N I A U N I T E D A R A B E M I R AT E S fear that there’s a global
of death for homosexuality. Q ATA R
movement toward accepting
Among those that don’t, people, when of a lot of these
Egypt has conducted mass ar- NIGERIA countries have posed them-
rests of gay men, and homo- YEMEN selves as defenders of the tra-
sexuals can face torture even SOMALIA ditional family,” she said.
in Lebanon, the Arab world’s “They’re trying to prevent
most liberal country. significant actions at the
A question now is how, or global level.”
whether, Islam’s posture to- Homosexuality is legal in
ward homosexuality figured in Homosexual acts are legal in Indonesia, Turkey, but antigay sentiment
Source: International Lesbian, Gay, Bisexual,
Omar Mateen’s killing of at Trans and Intersex Association with the exception of two provinces is rising there. Following Sun-
least 49 people at a gay night- day’s shooting, the Islamist
club in Orlando after claiming THE WALL STREET JOURNAL. pro-government Yeni Akit
allegiance to Islamic State. newspaper ran a headline
“God himself will give pun- ments vary among the major and Intersex Association, with couples prefer to stay under- any such executions in recent about “perverted” homosexu-
ishment to homosexuality. It schools of Islamic law. a handful of exceptions such ground because of public per- history. Committing or pro- als. Turkey’s foreign ministry
is not for people to decide,” While same-sex attraction as Bahrain and Mali. secution and fear of violence, moting homosexual acts in condemned the attack.
the shooter’s father, Seddique has historically been tolerated In practice, however, even activists and lawyers say. public is usually punished by According to Human Rights
Mateen, said Monday. His in some Muslim societies, gay countries where homosexual In Iran and Afghanistan, jail time, lashes and fines. Watch, gay people struggle
words reflected a negative sex has always been illegal be- acts are illegal rarely mete out homosexuality is banned, and Authorities said Mr. Ma- even in Lebanon, where the
stance toward homosexuality cause it occurs outside of the most severe punishments, harsh penalties have been en- teen made a 911 call declaring capital Beirut’s raucous club
that is deeply ingrained in marriage. in part because Shariah, or Is- forced against it. Iran exe- allegiance to the terror group scene includes gay bars.
large parts of the Muslim “In Islamic law, all sex out- lamic law, sets a high stan- cuted three men in 2011 on Islamic State in the middle of Authorities in neighboring
world—and in laws that pur- side a licit relationship is for- dard of proof—either a con- charges that included homo- his shooting rampage. Egypt have used criminal
port to deliver that holy judg- bidden, so by definition you fession or the testimony of sexual acts. Islamic State and other ex- charges, including “promoting
ment. cannot have a licit sexual rela- four upstanding men who wit- Afghan law penalizes ho- tremist organizations are debauchery” and “contempt of
In most Muslim societies, tionship between two men or nessed the act. mosexual relations with five known for an extreme hatred religion,” to make sweeping
the survival strategy for gay, two women,” said Jonathan Gay intercourse in Pakistan to 15 years in prison. A 2015 of homosexuals. In the terri- arrests of gay men who gather
lesbian, bisexual and trans- Brown, an expert in Islamic is punishable by life in prison, report by the State Depart- tory it controls in Syria and in private spaces, even though
gender communities has been law at Georgetown University. though the government sel- ment said police routinely ha- Iraq, Islamic State has made no law exists explicitly ban-
to stay below the radar. Ho- Homosexuality is outlawed dom sentences people, accord- rass, detain and use violence executions a hallmark of its ning homosexuality.
mosexuality isn’t recognized across most of the Muslim ing to a 2015 report by the against gay people. bloody reign. In one instance —Tamer El-Ghobashy,
as an identity or lifestyle in world, according to a recent U.S. State Department. Being In Saudi Arabia, homosexu- reported by the activist group Joe Parkinson
Islam, and homosexual acts report by the International openly homosexual remains ality can be punishable by Raqqa is Being Slaughtered and Raja Abdulrahim
are forbidden, though punish- Lesbian, Gay, Bisexual, Trans taboo on its streets, and gay death, but there haven’t been Silently, a blindfolded man contributed to this article.
Shooter Feeds
Worry of Terror
Grown in U.S. UNIVISION FLORIDA CENTRAL/EUROPEAN PRESSPHOTO AGENCY
BY DEVLIN BARRETT Mr. Comey defended the

AND DAN FROSCH FBI’s handling of two previous
probes involving the 29-year-
The gunman authorities say old suspect, saying there are
massacred 49 people at an Or- no indications agents missed
lando nightclub had pro- clues that could have prevented
claimed he wanted to be a the massacre.
martyr, traveled to Saudi Ara- Law-enforcement officials
bia and alarmed co-workers said the sheer volume of people
with claims of links to extrem- in the U.S. who have expressed
ists—troubling hints of a some interest in radicalism but
homegrown terrorist but not don't pose an obvious threat
enough to lead the Federal Bu- creates enormous logistical
reau of Investigation to con- challenges for investigators try-
clude he was a clear threat. ing to track them all.
FBI Director James Comey, “There’s probably a ton of
disclosing new details of Omar these guys in the U.S., and we The scene outside the Pulse nightclub in Orlando, Fla., early Sunday morning shortly after the attack that left scores dead.
Mateen’s background Monday, simply don’t have the resources
said Mr. Mateen took trips to to put someone on them 24/7,” He also claimed to have had Mr. Mateen tried to buy a Seamus Hughes, deputy di- said federal agents are scruti-
Saudi Arabia in 2011 and the said Deputy Chief Michael known friends of the Tsarnaev firearm. His name was removed rector of the Program on Ex- nizing Mr. Mateen’s friends and
following year, though Saudi Downing, who commands the brothers, who bombed the Bos- after the investigation closed. tremism at George Washington family to see if any aided in
and U.S. investigations found Los Angeles Police Department’s ton Marathon in 2013. Months later, the FBI ques- University, said the FBI must some way, though Mr. Comey
nothing suspicious. counterterrorism bureau. The FBI conducted surveil- tioned Mr. Mateen again, be- “triage” the flood of potential declined to discuss that part of
Mr. Mateen is an example Mr. Comey said FBI agents lance, searched public and pri- cause his name surfaced in a terror-related cases while bal- the investigation.
of precisely the threat that has are combing through every part vate records, and introduced in- probe of an American, Moner ancing security with rights. The officials said that while
vexed the agency in recent of the gunman’s life to see if formants to Mr. Mateen to see if Mohammad Abu-Salha, who “You don’t want the FBI forward the investigation is in early
years: terrorists living in the they missed anything in their they could determine if he was traveled to Syria and carried out leaning and encroaching on stages, Mr. Mateen’s motives
U.S. whose self-radicalization previous investigations and to planning a crime. When agents a suicide bombing. Investigators First Amendment-protected ac- appear to have been muddled,
is hard to spot. Despite the ac- determine if there is something questioned him about the state- determined the two knew each tivities, but they’re also tasked as he was eager to proclaim loy-
tions that led the FBI to scru- they could be doing differently. ments, Mr. Mateen said he had other in passing but didn’t have with prevention and investiga- alty to groups on opposite sides.
tinize Mr. Mateen, investiga- “We are looking for needles in a made them in anger because he meaningful connections, Mr. tion,” he said. In a 911 call during the at-
tors found nothing that nationwide haystack,” he told thought his co-workers were Comey said. Bruce Hoffman, a terrorism tack, he declared allegiance to
compelled them to act. reporters. treating him unfairly. Islamic State and similar expert at Georgetown Univer- Islamic State and said he was
“This is exactly what we’ve The FBI first investigated Mr. The investigation found no groups have had difficulty car- sity, said agents must weigh acting out of solidarity with Mr.
been talking about,’’ said Mr. Mateen in 2013 following com- evidence to contradict his rying out large-scale assaults in opaque factors such as the level Abu-Salha, who was a bomber
Comey. Mr. Mateen was radi- plaints by co-workers at a Flor- claims, Mr. Comey said. At that the U.S. But a shooting in San of extremist influences on for the Nusra Front. Those two
calized, he said, at least in ida courthouse, where he time, the FBI also probed Mr. Bernardino, Calif., last Decem- someone and the importance of groups actively oppose each
part on the internet and had worked as a security guard, who Mateen’s trips to Saudi Arabia. ber was also carried out by ap- online statements. “They are other.
no apparent interactions with were alarmed by his claims he That investigation led Mr. parently self-radicalized killers, having to make very difficult de- Law-enforcement officials
overseas terrorist groups, had relatives in al Qaeda and Mateen’s name to be placed on a and security experts fear such cisions every day they haven’t have said they are also examin-
links that can alert law en- was a member of Hezbollah, Mr. terrorist watch list, meaning the lone-wolf attacks will continue made in the past.” ing the role antigay bias may
forcement to radicalization. Comey said. FBI would have been notified to unfold. Law-enforcement officials have played in the attack.
Survivor of Nightclub Attack Says He Thought He Would Die

BY LAURA STEVENS rowing experience, along with cluding one who sustained a At around 2 a.m. Sunday, crush of about 20 to 22 pa- turned.
AND ARIAN CAMPO-FLORES doctors and nurses, at a news gunshot to the head. “I would Kathryn Bondani, a doctor at tients, said Chadwick Smith, a “He’s shooting everyone
conference Tuesday morning be surprised if we do not see the hospital, said in an inter- trauma surgeon. There was a that’s already dead on the
ORLANDO, Fla.—Angel Co- at Orlando Regional Medical the death toll rise,” he said. view that she and other medi- lull, presumably the period floor, making sure they’re
lon was hugging friends good- Center, which treated most of “We’re doing everything that cal staff received an alert to when Mr. Mateen was engaged dead,” Mr. Colon said. “I look
bye at the end of a festive the victims. we possibly can to pull them expect the arrival of gunshot in an hourslong standoff with over and he shoots the girl
night at the Pulse nightclub In all, authorities say Mr. through this, but they are crit- victims. The first patient was police. Then doctors received next to me. And I’m just there
when the shooting began. He Mateen killed 49 people and ically ill.” relatively stable and talking, word that another 20 to 25 laying down. I’m thinking, I’m
took three bullets in the leg injured 53, before being fatally leading her to think the others patients could be on their way. next, I’m dead.”
and fell to the floor, as people shot by police. The casualties might be in a similar condi- “That’s when the second Mr. Colon said the gunman
screamed and tried to flee ranged in age from 18 to 50
‘I’m just there laying tion, she said. But soon a wave wave started to come,” Dr. shot at him and hit his hand.
early Sunday. years. Officials said Mr. Ma- down. I’m thinking, of patients in precarious con- Smith said. The emergency de- Another bullet pierced his hip.
“I tried to get back up,” but teen was armed with a semi- dition jammed the emergency partment was packed, he said, “I had no reaction,” Mr. Colon
“I got trampled,” said Mr. Co- automatic rifle and a handgun.
I’m next, I’m dead,’ department. tearing up as he described the said. “I was prepared to just
lon, 26 years old, recalling the Of 44 patients admitted to recalls Angel Colon. They arrived with a gamut scene. “Add in people in pain, stay there, laying down so he
brutal attack unleashed by the hospital, 27 remain there, of wounds—to the chest, the people worrying about their won’t know that I’m alive.”
Omar Mateen. “All I could do said Michael Cheatham, a abdomen, the pelvis and the loved ones, people not know- Eventually, the gunman left
was just lay down there while trauma surgeon. Six are in in- Medical personnel de- extremities, doctors said. ing where their loved ones the area, and Mr. Colon said a
everyone was running on top tensive care, five in guarded scribed a “war zone” scene Some exit wounds, likely are—and we’re trying to help police officer grabbed him and
of me. All I could hear was the condition and 16 stable, he early Sunday morning as pa- caused by an assault rifle, them all,” he said. dragged him out. Because
shotgun, one after another.” said. Though nine patients tients flooded into the trauma were the size of a fist. “I don’t Mr. Colon arrived after shattered glass littered the
Mr. Colon is one of the died early on, none of the re- center, ferried by a stream of think I saw any patient that barely escaping death at the floor, he suffered repeated lac-
scores of shooting victims who maining ones have succumbed ambulances and other vehi- wasn’t shot more than once,” hands of the gunman. Lying on erations. “I’m grateful for
were rushed to nearby hospi- since then, he said. cles. “This was the largest di- Dr. Bondani said. “The whole the floor of the nightclub, he him,” Mr. Colon said. But “I’m
tals amid the chaos of the Still, Dr. Cheatham ex- saster that we probably could scene was pretty horrific.” thought he might be spared just getting cut—my behind,
worst mass shooting in U.S. pressed concern about the six have imagined,” Dr. Cheatham The emergency department after the gunman moved to my back, my legs…I just feel
history. He recounted his har- people in intensive care, in- said. contended with an initial another room. But soon he re- all this blood on me.”
PERSONAL JOURNAL
Once a Flake, Siri Is Now Key to Apple

The voice assistant is mand, like Amazon’s Echo or velop exponentially. At first, Apple
Google’s forthcoming Home. We’ll has limited its SiriKit developer
growing up, opening up, also have to see in practice how tool to a few domains, including
and a big part of the future well the Siris on different devices messaging, phone calls, photo
work together. search, ride booking, mobile pay-
BY GEOFFREY A. FOWLER Siri’s TV search now includes ments, exercise and in-car climate
YouTube. You’re not really search- control and entertainment. Google
The iPhone’s talking pal Siri ing the world of entertainment in can send messages on your behalf
has, to date, been about as helpful 2016 without access to all those to WhatsApp, Viber and more, but
as an umbrella in a hurricane. cat videos and up-and-coming pop doesn’t yet have anything quite
That’s about to change. stars. like SiriKit. Amazon’s Alexa has
At the Worldwide Developers Siri’s intelligence is growing. more than 1,000 third-party apps,
Conference on Monday, Apple CEO Apple is using Siri’s ability to but its devices are speakers that
Tim Cook touted parse through our calendars, mostly sit on a shelf, rather than
new features and emails, playlists and photos to travel with you.
catch-up software make its responses less random Apple earned a bad rap for
tweaks, from the and more useful, and even propose promising big and delivering little
iPhone and Mac responses via its new, Siri-pow- with Siri. It’s easy to get excited
to the Apple ered QuickType keyboard. Again, about promises from tech compa-
PERSONAL Watch and TV. this will bear out in real use, but nies. There’s a thin line between a
TECHNOLOGY One of the few Apple said on Monday that Siri helpful talking gadget and one that
technologies that would be able to respond to ques- you want to throw out a window
spanned all those tions like “Find videos I took at because you just wasted three
GETTY IMAGES
products was Siri, the virtual as- Iva’s birthday party.” Though Ap- minutes saying “ORDER ... A ...
sistant that lets us talk and inter- ple claims to have a privacy-con- LYFT …” over and over again to no
act with gadgets like they know us. scious data mining solution called avail.
Siri is growing up, and moving to “differential privacy,” its avowed When will Siri feel like an ac-
the center of Apple’s universe. Apple CEO Tim Cook laid out new features at Apple’s Worldwide Developers stance on privacy could make it tual assistant? That might be a
In the months ahead, Siri will Conference Monday. harder for it to keep up with un- ways off. Still, a deeper relation-
arrive on Mac computers and abashedly data-hungry rivals like ship is now within reach, said Ja-
tackle more complex tasks on the tions that don’t lend themselves to tant) integrate data about our Google. It’s hard to grasp context son Whitson, director of product
Apple TV, where it first appeared a keyboard, mouse or touch lives to predict what we need and and anticipate a person’s needs at UnderArmour’s popular Map-
last year. And most important, screen—and that includes many, if respond with context. The most when you don’t know exactly MyRun app, another early partner
Siri’s opening up: It—or should I not most, gadgets we’ll meet in surprising threat to Apple’s voice whom you’re serving. on the new Siri.
say she?—will gain the ability to the future. dominance is Amazon, whose Al- Siri’s finally learning to hear When iOS 10 comes out, Map-
send messages, make phone calls, Voice is useful for searching the exa, built inside the Echo speaker, us. Understanding context is natu- MyRun users will be able to just
book rides and pay for stuff using TV for a show, finding directions has become an unofficial member ral for humans, but very hard for ask Siri to start, pause, resume or
apps and services not made by Ap- while driving, using recipes when of my household. Why? It’s always computers. The new Siri can un- end a session. “When you are
ple. your hands are full of cookie a quick shout away, ready to per- derstand many ways to ask for the working out, having to interact
“I think we’re going to see dough and cuing up that Justin form basic tasks like set a timer or same thing, said Craig Federighi, with your phone is a barrier,” he
[Siri] become more important over Timberlake jam stuck in your play a song. Apple’s senior vice president of said. Trying to tap on a phone
time as people go from using Lyft head. If Apple is to have a future be- software engineering, during the while running can make you
a couple times per week to a cou- Apple was one of the first tech yond the iPhone, it will have to keynote. “Tell Nancy I’ll be five dizzy—and puts you at risk of run-
ple times per day,” Lyft CTO Chris giants, back in 2011, to build talk- master voice. And Apple has the minutes late with WeChat” counts ning into things.
Lambert told me after Apple’s key- ing tech into everyday devices. At chance to regain the pole position as much as “Siri, can you shoot a “What Apple released is just
note. The ride-hailing company’s the time, they called it a beta, and in talking tech if it follows through message on WeChat and say that the tip of the iceberg,” said Mr.
app is one of the first to tap into it’s felt like test software for too on the vision it laid out on Mon- I’ll be five minutes late?” (And it Whitson. He sees a day when Map-
Siri. When iOS 10 arrives this fall, long. Siri now receives over 2 bil- day. Here’s why: can do that in all sorts of lan- MyRun is almost entirely a hands-
you’ll be able to say to your lion requests a week. Even so, Siri is finally, mostly, every- guages.) Apple even said the new off experience. We’ll be able to ask
iPhone, “Order me a Lyft,” and a when I ask Siri to help with some- where. Now that it’s coming to the Siri would be able to respond to Siri more sophisticated questions
ride will just show up, no buttons thing, it often just pops up a ran- Mac, too, you’ll be able to turn to tricky context-based queries such about our workout habits, or use it
required. dom search or misunderstands in a Siri regardless of which device is as “Remember this later.” to track our diet. “She—I mean
Apple didn’t do a very good job way that makes me say, “Oh, Siri,” closest—assuming you have all Ap- Most of all: Now we can tell it—could eventually be your
Monday of explaining why all of like it’s a lost puppy. ple gear. There was no mention of Siri what to do, not just ask coach,” he said.
this matters. Talking to a com- Meanwhile, Apple lost ground it on Monday, but I hope Apple questions. Just as the App Store Well, before Siri can be my run-
puter like it’s human isn’t just to rivals like Google. The search will follow through with rumored made the iPhone way more useful ning buddy, Apple has to conquer
some geek Star Trek fantasy. Our giant’s Voice Search and Now ser- plans to introduce a stand-alone than it was when it only ran Ap- this: Talking to your phone (or TV
voices are turning out to be crucial vices (currently being wrapped Siri device that lives at home and ple-made apps, opening Siri to or watch or computer) still makes
for interacting with tech in situa- into its forthcoming Google Assis- is always listening for your com- outsiders will let its new skills de- you look a little crazy.
From Financial Deal-Maker to Professional Triathlete

BY JEN MURPHY
When she worked on Wall

Street, Sarah Piampiano put in 90-
plus hour workweeks, smoked two
packs of cigarettes a day and often
grabbed a few hours’ sleep a
night at the office.
Today, Ms. Piampiano trains for
40 hours a week, is addicted to en-
ergy gels and electrolyte drinks,
and on most nights gets 10 hours
of shut-eye.
Her transformation, from a
driven deal-maker at HSBC to
driven profes-
WHAT’S YOUR sional triathlete,
JASON HENRY FOR THE WALL STREET JOURNAL (2)
WORKOUT? began with a

friendly wager in
June 2009. A
friend bet Ms. Piampiano that she
couldn’t beat him in the Moose-
man Triathlon in Alexandria, N.H.,
an Olympic distance race made up
of a 0.93-mile swim, a 24.8-mile
bike ride and a 6.2-mile run.
Ms. Piampiano had been a Divi-
sion I ski racer and a cross-coun-
try running talent at Colby Col-
lege, in Waterville, Maine. After
graduating in 2002, she let exer- Sarah Piampiano, with her Cervélo Cycles P5 time-trial bike, at left, competed in 10 Ironman races in 2015, finishing No. 7 at the Ironman World Championship in
cise slide to focus on her career. Hawaii. At right, she runs for one to two hours most mornings on the trails on Mount Tamalpais near Mill Valley, Calif., as part of her training regimen.
With no training at all for the New
Hampshire event, she smoked her World Championship in Kona, Ha- competed in 10 Ironman races, in- in Idaho. “My big goal for 2016 is which manually break up scar tis-
friend in the triathlon and got waii, with a 2.4-mile swim, a 112- cluding a seventh-place finish at to be on the podium at Ironman sue in the muscles.
hooked on the sport. mile bike ride, and a 26.2-mile run. the Ironman World Championship Kona this October,” she says. She Ms. Piampiano tries to get eight
Three months later, she kicked Recognizing her ability, Mr. in Hawaii. is currently ranked seventh in the to 10 hours of quality sleep at
her smoking habit and competed Dixon persuaded her in 2012 to “It was an intense year,” she world Ironman standings. night. “By six, I put away all elec-
in a triathlon in Miami, placing quit her job and turn pro. Now, says. “I wasn’t home for more than tronics,” she says. She sneaks in a
first in her age group using her Ms. Piampiano, 35, lives and trains two weeks at a time.” This year, The Workout 30- to 45-minute nap three or four
brother’s 20-year-old bike. “That’s in San Rafael, Calif. she plans to stay closer to home, Ms. Piampiano’s days are a cy- times a week.
when I realized I was pretty good,” While racing the Ironman Texas focusing less on racing and more cle of eat, work out, recover, re-
Ms. Piampiano says. in 2014, she got a stress fracture on technique and strength. peat. Morning workouts focus on The Diet
She started working with tri- in her femur and spent the rest of On April 17, Ms. Piampiano was intensity, and afternoons on en- On average, Ms. Piampiano eats
athlon coach Matt Dixon in 2010, the year in rehab. In 2015, rather the first-place woman in the Iron- durance. A typical day starts with 10 meals and snacks a day. “I wake
and in 2011 asked to reduce her than have her slow down, Mr. man 70.3 New Orleans, a half Iron- a 30-minute warm-up run and core up at 4:30 and the first thing I do
hours at HSBC to 30 a week so she Dixon encouraged her to race man covering a 1.2-mile swim, a work, followed by an indoor swim is eat a half of a banana and a ta-
could spend more time training. more. “It was a way to boost my 56-mile bike ride, and a 13.1-mile of 90 minutes to two hours. She blespoon of almond butter,” she
That year, she was the top Ameri- confidence and resilience,” Ms. Pi- run. She is set to compete June 26 transitions from swimsuit to says. She tries to eat 100 calories
can amateur to finish the Ironman ampiano says. In 12 months, she in the Ironman 70.3 Coeur D’Alene sneakers and goes right into a every 20 minutes during her
one- to two-hour run. Some days morning swim and running work-
she’ll do an interval workout on outs. Her second breakfast is two
Rules for Refueling During a Workout the treadmill, other days she’ll
tackle hills outside.
hard-boiled eggs and a half-cup of
cold-soaked oats with almond
Whether you’re running a 5K race “Those are healthy foods, but you ac- clients prefer regular foods. She sug- From 9:30 a.m. to 11 a.m., Ms. milk, pecans, walnuts and bananas.
or competing in an Ironman, your fuel tually want to avoid complex carbo- gests a white bagel with jelly and a Piampiano trains with strength “I limit carbs to the morning,” she
strategy should focus on carbs, not hydrates and fiber during workouts banana before a competition, and coach Brendon Rearick at Move-SF says. A snack might be three car-
calories, says Jamie A. Cooper, author because they slow down digestion, white bread with honey or low-fiber studio, in San Francisco. He and rots, two tablespoons of almond
of “Complete Nutrition Guide for Tri- which means it takes longer for your salted crackers during a race. Pre- Mr. Dixon work closely to develop butter or a protein shake. Lunch
athletes” and founder of Competitive body to get nutrients,” she says. workout, she suggests a meal rich in complementary workouts using might be egg salad or quinoa and
Nutrition Systems, a Lubbock, Texas, Simple sugars—the ones trendy di- carbohydrates and low in fat, fiber kettlebells and resistance bands. grilled vegetables. Late afternoon
consulting company. ets tell us to avoid because they are and protein. Post-workout, she sug- Afternoon sessions might in- she has fruit, nuts or half of a Clif
“The general rule of thumb is to less healthy, like white bread—are ac- gests 16 to 20 grams of protein, clude a two- to four-hour bike ride Bar. She refuels during endurance
try to get at least 60 grams of carbo- tually an ideal source of workout along with carbs, to help with muscle or a 90-minute outdoor swim. workouts with trail mix or Clif Or-
hydrates per hour, which is roughly fuel, she says. Electrolytes and fluids recovery. Twice a week she goes for a 90- ganic Energy Food. Dinner is steak
around 240 calories an hour, when are the other keys to fueling during a “Low-fat chocolate milk is a great minute massage. “When my back or fish, grilled vegetables and a
you are exercising for an hour or lon- hard workout. recovery drink,” she says. For those is tight, it limits the rest of the big salad. If she has a big workout
ger,” says Dr. Cooper, who lives in While sports drinks and energy new to training and racing, she sug- way my body moves,” she says. the next morning, she will drink a
Athens, Ga. And the ideal carbohy- products are designed to have the gests setting an alarm to go off ev- Other days she spends an hour protein shake or eat mash—a con-
drate isn’t a whole-grain bagel or a ideal balance of carbs and electro- ery 15 minutes as a reminder to drink with her chiropractor, who per- coction of oats, jam, almond butter
peanut butter and jelly sandwich. lytes, Dr. Cooper says, some of her water and take in fuel. Jen Murphy forms active release techniques, and applesauce—before bed.
ARTS & ENTERTAINMENT
Italy’s Slow Museum Reform

BY MANUELA MESCO
WHEN MAURO FELICORI became the director

last fall of the Reggia di Caserta—a Ver-
sailles-like royal palace in southern Italy—
he worked long hours to fix a laundry list of
problems at the long-neglected museum.
CLOCKWISE FROM LEFT: ALAMY; ALESSIO CUCCARO; MAURIZIO DEGL’INNOCENTI/ASSOCIATED PRESS

He reorganized the staff, extended open-
ing hours during busy times and put a series
of works by artists such as Andy Warhol and
Keith Haring, which had long been owned by
the museum, on display for the first time.
Mr. Felicori’s efforts were a hit with visi-
tors. Revenue in the first quarter of the year
was 80% higher than the year before. But the
moves didn’t sit well with unionized work-
ers. In February, union representatives wrote
a letter to the culture minister complaining
that Mr. Felicori’s long hours in a govern-
ment institution outside of normal business
hours could jeopardize museum security.
The tensions at the Reggia di Caserta il-
lustrate the broader problems facing Italian
museums. Over the past two years, the coun-
try has embarked on a sweeping reform of
its artistic patrimony. In an effort to stream-
line bureaucracy and improve museum man-
agement, Culture Minister Dario Franceschini
has announced an increased budget and a se-
ries of radical measures including plans to
select new directors for 29 museums
through an international selection process.
But resistance from unions, limited re-
sources and decades of neglect have ham- The Reggia di Caserta above; Capodimonte director Sylvain Bellenger, right.
pered the pace at which the ministry can
make meaningful changes. Existing laws, such After his appointment two years ago, Mr. ministry had appointed
as those prohibiting museum directors from Franceschini vowed to hire experienced mu- new directors for the
hiring their own staffs, are hobbling efforts seum directors to shake up the jobs that were Uffizi, the Capodimonte
to improve operations. “The reform only previously only reserved for Italian public ser- and Milan’s Pinacoteca
deals with creating directors, but it doesn’t vants. For the first time, they would have condi Brera, among others.
create the administrative machine to make trol over their own budgets and exhibitions. A larger problem has
museums work,” says Tomaso Montanari, He also announced the culture ministry’s been that under current
professor of modern art at Naples University. budget will rise to over €2 billion this year, up laws, directors don’t
Nearly everyone agrees that Italy’s muse- 27% from last year. Another €1 billion will be have the power to hire
ums are in dire need of reform. Following used in the coming years for restoration proj- staff. The lack of art his-
the recession and a major fiscal crisis, the ects and improvements. torians, curators or art
Italian government cut spending on culture Mr. Franceschini’s efforts have met with marketing experts has
by 22% between 2008 and 2014. Italy some success. The number of visitors to Ital- made it difficult to ad-
spends nearly half as much on recreation, ian museums was up 13.5% in the first quar- dress chronic weakness
culture and religion as France does. ter of this year compared to last year. And in communications,
As a result, Italy’s famous monuments and museums have tackled some simple problems. strategy and fundraising,
museums are overcrowded and literally crum- But deeper change has been elusive. In the directors say.
bling. A lack of modern crowd-management an effort to shake up the museums with Anna Coliva, director at Rome’s Borghese red tape in securing extra funds to repair the
technology means huge lines plague sites such competitive, internationally minded direc- Gallery, would like to outsource some mu- air conditioning was so thick that it remained
as the Uffizi, which has two million visitors a tors, the ministry encouraged foreign appli- seum services, but she lacks a staffer with broken until recently, Mr. Bellenger said.
year. In Pompeii, heavy rains caused the wall cants for museum director jobs. But only experience in organizing a bid. “We can con- Indeed, experts warn the ministry’s ef-
in a temple to crumble in 2014, while pieces 10% of the applicants were from outside It- trol our own budget now, which is good, but forts continue to fall short to make signifi-
of a fresco were stolen due to lack of security. aly, and directors with foreign experience we don’t have a budget director,” she says. cant improvement. Although the culture
“Italian museums are at least 50 years were scarce, says Lorenzo Casini, an advisor When the air conditioning at Capodimonte ministry has plans to hire 500 new people,
behind,” says Sylvain Bellenger, the new di- to the ministry who helped organize the se- broke last year, the museum became a “steam Mr. Casini, the ministry advisor, says at least
rector of Naples’ Capodimonte Museum. lection process. Even so, by last year, the bath” when a heat wave swept Italy. But the 1,200 are needed to fill the gap in personnel.
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OPINION
REVIEW & OUTLOOK
President Canute
America Deserves Better And Orlando
E
ven amid a terrorist massacre on the is nurtured in havens across the Middle East.
scale of Orlando, the American people Mrs. Clinton’s response—in TV appearances In the spring of 2013 gains the Taliban have made in the face
Barack Obama deliv- of America’s withdrawal.
are getting more reasons to justify their and then in a prepared speech in Cleveland—
ered the defining Apologists for Mr. Obama will rejoin
unhappiness with the political was mostly a stage-managed speech of his presi- that it’s unfair to blame him for trends
class. By which we mean the Neither Trump nor walk through the aftermath of dency on the subject of in terrorism, an argument that would
day-after responses of Presi- Clinton are rising to the the Orlando massacre. More terrorism. Its premise have more credibility if he hadn’t been
dent Obama and the two pre- than anything, she used the was wrong, as was its so eager to take credit for those trends
sumptive nominees, Donald Islamic State threat. occasion as a political oppor- GLOBAL
thesis, as were its pre- only three years ago. The same apolo-
VIEW
Trump and Hillary Clinton. tunity to define her opponent By Bret
dictions and recom- gists also claim that the U.S. cannot
The American people deserve as a divider and herself as a mendations. We are possibly cure what ails the Middle East,
Stephens
a better strategy to defeat terrorism than they bipartisan unifier against “all those who hate.” now paying the price and that no law-enforcement agency
are getting. She mentioned as always that she has a “plan” for this cascade of folly. can stop a lone-wolf terrorist such as
Mr. Obama appears to be doubling down on to fight Islamic State. “Today, Osama bin Laden is dead, Omar Mateen.
and so are most of his top lieutenants,” But these arguments fail. The rise of
the evasions of the past eight years, as he tries Earlier in the day, however, Mrs. Clinton did
the president boasted at the National Islamic State was a predictable result of
to prove to the last day that he isn’t George W. say one good thing about defending the U.S. Defense University in Washington. Mr. Obama’s abdication in Iraq and es-
Bush. The killer of 49 people, Mr. Obama said from terrorist attack: “We have the resources, “There have been no large-scale attacks pecially Syria—a result Mr. Obama him-
Monday, “appears” to have declared his loyalty relationships and experience to get it done.” on the United States, and our homeland self foresaw in his 2013 speech. “We
to Islamic State “at the last minute.” Meaning That is true, and that is the heart of the issue. is more secure.” The “future of terror- must strengthen the opposition in Syria,
exactly what? Presumably on the Obama anti- After Orlando, San Bernardino, Fort Hood, ism,” he explained, consisted of “less while isolating extremist elements,” he
terrorism scale of 1 to 10, we’re still not at 10 Paris and Brussels, the one question American capable” al Qaeda affiliates, “localized said, “because the end of a tyrant must
on his watch because the terrorist slaughters voters need answered is which of these two can- threats” against Westerners in faraway not give way to the tyranny of terror-
in Orlando, Fla., and San Bernardino, Calif., didates will deploy the enormous intelligence places such as Algeria, and homegrown ism.” Was the opposition strengthened?
were “homegrown.” and military resources of the U.S., enlist its al- killers like the Boston Marathon bomb- Were the extremists isolated?
ers.
Mr. Trump’s remarks, on various TV shows lied relationships world-wide and use what it
All of this suggested that it was time
and in a speech in New Hampshire Monday, already knows about terrorism to deter future to call it quits on what Mr. Obama de- Barack Obama discovers
gave little evidence he has talked to anyone in atrocities on American soil. As of today, there rided as “a boundless ‘global war on
the intelligence or foreign-policy communities is little reason to think either candidate would terror.’ ” That meant sharply curtailing
too late that he cannot order
about the substantive details of addressing the deploy this existing U.S. strength. drone strikes, completing the with- the tide of war to recede.
threat. He suggested on TV that some of the Or- Most striking about the post-Orlando re- drawal of U.S. forces from Afghanistan
lando club-goers should have had guns sponses of the two presumptive presidential and closing Guantanamo prison. It
“strapped to their ankles.” Mr. Trump devoted candidates is how carefully political they were. meant renewing efforts “to promote As for lone wolves, one study from
about 80% of his New Hampshire speech to re- With 49 Americans dead at a terrorist’s hand, peace between Israelis and Palestin- last year cited 38 cases of “lone wolf”
stating and defending his proposed ban on Mus- the moment calls for some sense of the candi- ians” and seeking “transitions to de- terrorism between 1940 and 2001, an-
lim immigration, with the proviso that it would dates’ counterstrategies. But neither candidate mocracy” in Libya and Egypt. And it other 12 during the eight years of the
meant working with Congress to repeal Bush administration—and more than 50
be “temporary,” once we can “perfectly screen appears willing to step outside his or her politi-
the 2001 Authorization for Use of Mili- since then.
these people.” cal comfort zones. tary Force (AUMF) against al Qaeda. The phenomenon is catching in part
But Mr. Trump’s thoughts on what exactly Mr. Trump, by his own admission Monday, “This war, like all wars, must end,” because Islamic State is canny at using
he would do to stop Islamic terrorism at its has been promoting a Muslim immigration ban he said. “That’s what history advises. the internet and social media to attract
source in the Middle East weren’t much more for months. But beyond that, where is he going? That’s what our democracy demands.” and activate recruits. But what Islamic
than a footnote. On the one hand, he rightly said Mrs. Clinton’s supporters keep whispering she’s King Canute of legend stood on an State mainly does is give aimless and
the goal must be to defeat Islamic terrorism by a closet hawk, willing to do more than Mr. English shoreline and ordered the tide insignificant young men what most
uniting the civilized world in the fight. But do- Obama has to end Islamic State’s destabiliza- to recede. President Canute stood be- young men secretly crave—a cause
ing what? tion of the Middle East and Europe. So far, she’s fore a Beltway audience and ordered the worth dying for.
His sustained assault on U.S. involvement in left the impression that her policy would be war to end. Neither tide nor war When Mr. Obama attempts to reas-
overthrowing Libya’s Moammar Gadhafi and Obama 2.0—more bombing, perhaps, but no obeyed. sure Americans by suggesting, as he did
In 2010, al Qaeda in Iraq—Islamic Monday, that Mateen was not part of “a
the “total disaster” of “nation-building” sug- real strategy to destroy Islamic State.
State’s predecessor—was “dead on its larger plot,” he demonstrates once
gests Mr. Trump is more inclined to play to iso- The two presidential candidates sound like feet,” as terrorism expert Michael again that he doesn’t understand the
lationist sentiments in the U.S. than discuss opponents in a college debate trying to score Knights told Congress. World-wide, the enemy. Islamic State, al Qaeda and
military options for what even he calls the need rhetorical points. Mr. Trump keeps saying, “We U.S. government estimated al Qaeda’s other jihadist groups are not criminal
to “defeat Islamic terrorism.” An immigration must find out what is going on.” We know total strength at no more than 4,000 conspiracies. They are a religious move-
policy by itself cannot end that threat. what’s going on. We’ve known it since Islamic fighters. That was the result of George ment. No coordination is required for
Mr. Trump also made a great show Monday State rose to power during the Obama Presi- W. Bush’s surge in Iraq, of Mr. Obama’s the true believer to put his faith into ac-
of calling out Mrs. Clinton and President Obama dency. The American people have about five own surge in Afghanistan, and of the tion.
for not saying the words “radical Islamic terror- months to be given a better idea than they have aggressive campaign of drone killings in It would require more humility than
ism.” Words matter but battle plans matter now of what Donald Trump or Hillary Clinton Pakistan and Yemen. Mr. Obama is capable of mustering to
But then the Obama Doctrine kicked admit that what happened in Orlando,
more against a terrorist enemy whose violence will do about it.
in. Between 2010 and 2013 the number Fla., is also a consequence of his deci-
of jihadists world-wide doubled, to sions—of allowing Iraq and Syria to de-
Another Attack in Paris 100,000, while the number of jihadist

groups rose by 58%, according to a
scend to chaos; of pretending that we
could call off the war on terror because
N
Rand Corp. study. That was before Is- fighting it didn’t fit a political narra-
early lost amid the coverage of the Abballa was one of thousands of terror sus- lamic State declared its caliphate. tive; of failing to defeat Islamic State
weekend’s Orlando terror attack, Mon- pects monitored by French authorities who Today, the U.S. government estimates swiftly and utterly; of refusing to rec-
day evening saw another Islamic State have thwarted several attacks since Novem- that Islamic State can count on as many ognize the religious roots of terror; of
outrage in France. This time ber’s shootings in Paris. But as 25,000 fighters. This is after a two- treating the massacre in San Bernar-
the victims were a senior po- The justice system isn’t with so many to track, it’s in- year campaign of airstrikes to destroy dino, Calif., as an opportunity to lec-
lice officer and his companion, designed to be a weapon evitable that some will slip the group. In Libya alone, U.S. intelli- ture Americans about Islamophobia,
gence recently doubled its estimate of and Orlando as another argument for
stabbed to death in and through the cracks. That only
Islamic State fighters, to as many as gun control.
around their home by a man of self-defense in a war. highlights the risk of treating 6,000. Even “core” al Qaeda is surging This is the president’s record. His
who pledged support to Is- terrorism as a problem for again in its Afghan and Pakistani heart- successor will have to do better to avoid
lamic State and uploaded a the domestic intelligence and land, thanks in part to the military future Orlandos. Will she?
video of the murders on the internet. The vic- criminal-justice systems, even when operating
tims are survived by their 3-year-old son, who with the emergency powers in effect since last
witnessed the attack. year.
LETTERS TO THE EDITOR
The alleged attacker identified by prosecu- Victory in the war on terror will come on
tors, Larossi Abballa, was known to authorities. a battlefield, when Islamic State is defeated as Guaranteed Income Is a Guaranteed Problem
He spent several years in prison after a convic- a force capable of occupying its neighborhood
tion for membership in a French group feeding and inspiring foreign murders. French Presi- I hope people will take Charles Mr. Murray would pay for UBI by
Murray’s idea of the government pro- eliminating the bureaucracy that over-
recruits to al Qaeda in Pakistan and Afghanistan. dent François Hollande understood this when
viding a universal basic income (UBI) sees transfer payments. Ho ho ho. Let
He was under surveillance before Monday’s at- he ordered stepped-up air assaults on Islamic instead of the current welfare system him try eliminating just one union-pro-
tack. After police killed him while storming the State after November’s attacks. That’s less true as an idea to be seriously pursued (“A tected federal job, let alone sending an
victims’ house they found a list of other poten- of some of his peers in Europe and NATO. Until Guaranteed Income for All,” Review, entire bureaucracy into extinction.
tial targets. Islamic State claimed responsibility that changes, we’ll live in a world of frequent June 6). The benefits to individuals HOWARD CAINE
for the attack. and random terror. and society are probably understated New York
and the goals achievable with a couple
of modifications. In my retirement planning, I fac-
LinkedIn and the Tech-Valuation Boom The first suggestion would be to
start at age 16 instead of age 21.
tored in my anticipated Social Secu-
rity payments, state pension, Medi-
M
icrosoft’s Monday announcement that Rather than giving people money and care premiums, as well as other usual
The stock gains of the Obama era are partly
hoping for the best, starting the UBI expenses. I budgeted so as to be able
it’s buying LinkedIn for $26.2 billion a reflection of the resilience of American busi- while in school would allow time to to live on Social Security and pension
raises important questions about the ness in a tough environment, but they may also teach money management, the bene- income and not have to make continu-
value of technology companies result in part from the U.S. fits of savings, preventive health care ing withdrawals from my IRAs. If Mr.
and stocks. The deal also car- Microsoft is paying Federal Reserve’s monetary and the best ways to spend health- Murray’s UBI plan were to be imple-
ries policy lessons. $26 billion for a money- exertions. Perhaps Mr. Hoff- care dollars. mented this year, for example, it
The software giant is pay- man decided this is the time to Unfortunately, the UBI will fail would amount to a loss of 43% of my
ing $196 a share for the social- losing social-media site. sell near the top. without modifications to the health- planned income as a result of the ter-
media firm, a 50% premium It’s clear how government care system. Hospital expenses drive mination of Social Security payments.
over Friday’s closing price. Mi- policies are shaping the health-care costs and need to be ad- I assure Mr. Murray that I will com-
crosoft CEO Satya Nadella is shelling out roughly LinkedIn deal. As of March 31, Microsoft’s balance dressed. We do need to replace the municate with my elected representa-
welfare state. The idea of providing a tives to block any UBI program unless
seven times LinkedIn’s annual revenues for a sheet held more than $105 billion in cash, cash
universal basic income is a good start, and until all questions about such a
business that isn’t profitable and has seen slow- equivalents and short-term investments. You and with some modifications to the drastic change be fully explained to
ing growth despite its 433 million users. would think it would pay cash for LinkedIn. rest of the system it can work. those who would allegedly benefit
LinkedIn allows these users to share rolodexes, But the U.S. has the industrialized world’s MICHAEL F. RAAB, M.D. from such a scheme. That may take
seek job opportunities and learn about industry highest corporate income-tax rate and insists on Sanibel, Fla. Mr. Murray and his co-believers quite
issues. Most of LinkedIn’s revenue comes from taxing foreign profits when they return to the a while.
businesses seeking to identify potential hires. U.S. So according to Microsoft’s most recent Mr. Murray’s economic case for a CURTIS GREEN
In a note to employees, Mr. Nadella touted quarterly report, nearly $103 billion of the cash UBI isn’t unlike the case for replacing Garland, Texas
“new experiences such as a LinkedIn newsfeed was held “by our foreign subsidiaries and would our indecipherable and inefficient tax
that serves up articles based on the project you be subject to material repatriation tax effects.” code with a flat tax. But vested inter- There are three types of people:
are working on and [Microsoft] Office suggesting With the Fed still holding interest rates near ests, including the bureaucratic appa- frugals, who produce more than they
ratus of government tax collectors, consume; prodigals, who by choice
an expert to connect with via LinkedIn to help zero, Microsoft plans to borrow most or all the
would see their jobs disappear, so produce less than they consume; and
with a task you’re trying to complete.” LinkedIn cash to complete the purchase. they and their allies in Congress block the disabled, who physically can’t pro-
could also provide users of Microsoft’s sales soft- Another policy lesson is how a largely unreg- or disfigure legitimate tax-simplifica- duce as much as they consume. A
ware with info on potential customers. ulated tech industry has been able to drive inno- tion measures. country’s success depends on fair
Mr. Nadella has to take some risks because vation and displace incumbents. Microsoft dom- In a similar vein, one suspects that treatment of all three groups. America
Microsoft was late to embrace cloud computing inated the desktop-computer era but now must a UBI compromise between the GOP today unfortunately treats prodigals
and has largely failed in the mobile arena. Per- battle to maintain its business in the era of and Democrats would preserve too the same as the disabled.
haps the deal can keep Microsoft at the center smartphones. LinkedIn and other social-media much of the existing apparatus and, M.R. WARD SR.
of corporate life. companies are disrupting a host of industries, once in place, would set the stage for Gaviota, Calif.
But what about LinkedIn co-founder Reid much as Google has changed the landscape of incessant calls for higher taxes (on a
shrinking workforce) and fair in-
Hoffman? The billionaire likely doesn’t have any marketing and advertising. Letters intended for publication should
creases in an inadequate UBI. Mr. be addressed to: The Editor, 1211 Avenue
particular need for liquidity, yet he’s accepting Contrast these markets with the highly regu- Murray’s conceptual framework for a of the Americas, New York, NY 10036,
a price 27% below LinkedIn’s February 2015 lated world of finance, in which a host of well- UBI is enticing, but implementation is or emailed to wsj.ltrs@wsj.com. Please
high. The nagging concern about this era’s surg- funded “fintech” companies struggle to chal- very unlikely to produce the ideal end- include your city and state. All letters
ing tech valuations is a subset of unease about lenge the giants of banking. Fortunately for Mr. game he envisions. are subject to editing, and unpublished
the stock market: Can a slow-growth economy Nadella, the market will judge the wisdom of his ALAN ROSE letters can be neither acknowledged nor
returned.
support high equity prices? LinkedIn purchase, not politicians. Naples, Fla.
OPINION
Islam’s Jihad Against Homosexuals

By Ayaan Hirsi Ali erance toward homosexuality. Ex- People acquire these evil habits
T
tremists don’t just commit violence due to a lack of proper guidance
he Orlando massacre is a against LGBT people. They also and education.”
hideous reminder to spread the prejudice globally by Farrokh Sekaleshfar, a Shiite
Americans that ho- preaching that homosexuality is a cleric educated in London, declared
mophobia is an integral disease and a crime. of homosexuality in 2013: “Death is
part of Islamic extrem- Not all Muslims are homophobic. the sentence. We know there’s
ism. That isn’t to say that some Many are gay or lesbian them- nothing to be embarrassed about
people of other faiths and ideolo- selves. Some even have the courage this. Death is the sentence.” He
gies aren’t hostile to members of to venture into the gender fluidity was speaking at the Husseini Is-
the lesbian, gay, bisexual and that the 21st-century West has lamic Center outside Orlando, Fla.
transgender, or LGBT, community. come to recognize. But these LGBT Yes, Orlando. He spoke there again
Nor is it to say that Islamic ex- Muslims are running directly coun- in April.
tremists don’t target other minori- ter to their religion. These men express their hostil-
ties, in addition to engaging in In his 2006 book “Crime and ity toward the LGBT community
wholly indiscriminate violence. But Punishment in Islamic Law,” the only verbally, but the Orlando at-
it’s important to establish why a Dutch scholar Rudolph Peters tack was hardly the first manifes-
man like Omar Mateen could be notes that most schools of Islamic ASSOCIATED PRESS tation in the U.S. of Islamist anti-
motivated to murder 49 people in law proscribe homosexuality. They gay violence. During a New Year’s
a gay nightclub, interrupting the differ only on the mode of punish- Eve celebration in the first hours
slaughter, as law-enforcement offi- ment. “The Malikites, the Shiites of 2014, Musab Masmari tried to
cials reported, to dial 911, proclaim and some Shafi’ites and Hanbalites set fire to a gay nightclub in Seat-
his support for Islamic State and are of the opinion that the penalty tle; he is serving 10 years in prison
then pray to Allah. is death, either by stoning (Ma- Near the Pulse nightclub in Orlando, Fla., after the mass shooting on Sunday. on federal arson charges. Law-en-
likites), the sword (some Shafi’ites forcement officials say that Ali
and Hanbalites) or, at the discre- tories have laws that criminalize in the strongest possible terms. The Muhammad Brown, an Islamic
The rise of modern Islamic tion of the court, by killing the homosexuality, prescribing punish- Middle East Media Research Insti- State supporter who is now in
culprit in the usual manner with a ments ranging from fines and tute reported in 2006 that when prison for armed robbery, also
extremism has worsened sword, stoning him, throwing him short jail sentences to whippings Sheikh Yusuf al-Qaradawi, one of faces charges for terrorism and
an institutionalized from a (high) wall or burning him and more than 10 years in prison the world’s leading Sunni clerics four murders, including the 2014
(Shiites).” or death. and chairman of the European execution of two men in Seattle
Muslim homophobia. Under Shariah—Islamic law— These countries’ laws against Council for Fatwa and Research, outside of a gay nightclub.
those engaging in same-sex sexual homosexuality align with the atti- was asked how gay people should Following the horrific attack in
acts can be sentenced to death in tudes of the overwhelming majority be punished, he replied: “Some say Orlando, people as usual have been
I offer an explanation in the nearly a dozen countries or in large of their populations. In 2013 the we should throw them from a high rushing to judgment. President
form of four propositions. areas of them: Iran, Saudi Arabia, Pew Research Center surveyed the place, like God did with the people Obama blames lax gun laws. Donald
1. Muslim homophobia is institu- Yemen, Sudan, the northern states beliefs of Muslims in 36 countries of Sodom. Some say we should Trump blames immigration. Neither
tionalized. Islamic law as derived of Nigeria, southern parts of Soma- with a significant Muslim popula- burn them, and so on. There is dis- is right. There has been comparable
from scripture and, as evolved over lia, two provinces in Indonesia, tion or majority, including asking agreement . . . . The important thing carnage in countries with strict gun
several centuries, not only condemns Mauritania, Afghanistan, Qatar, the about their views of homosexuality. is to treat this act as a crime.” laws. The perpetrator in this case
but prescribes cruel and unusual United Arab Emirates. Death is also In 33 out of the 36 countries, more Such ideas travel. In 2009 Anjem was born in the United States.
punishments for homosexuality. the penalty in the territories in than 75% of those surveyed an- Choudary, an infamous London This is not primarily about guns
2. Many Muslim-majority coun- northern Iraq and Syria controlled swered that homosexuality was imam and self-proclaimed “judge of or immigration. It is about a
tries have laws that criminalize and by Islamic State. “morally wrong,” and in only three the Shariah Court of the U.K.,” deeply dangerous ideology that is
punish homosexuals in line with Iran is notorious for hanging did more than 10% of those sur- stated in a press conference that all infiltrating American society in the
Islamic law. men accused of homosexual behav- veyed believe that homosexuality homosexuals should be stoned to guise of religion. Homophobia
3. It is thus unsurprising that ior. The Associated Press reports was “morally acceptable.” death. comes in many forms. But none is
the attitudes of Muslims in Mus- that since 2014 Islamic State has In many Muslim-majority coun- In the U.S., Muzammil Siddiqi, more dangerous in our time than
lim-majority countries are ho- executed at least 30 people in Syria tries—including Afghanistan, where former president of the Islamic So- the Islamic version.
mophobic and that many people and Iraq for being homosexual, in- Omar Mateen’s parents came from— ciety of North America, has writ-
from those countries take those at- cluding three men who were LGBT people face as much danger ten: “Homosexuality is a moral dis- Ms. Hirsi Ali, a fellow at the Har-
titudes with them when they mi- dropped from the top of a 100-foot from their families or vigilantes as order. It is a moral disease, a sin vard Kennedy School, is the author
grate to the West. building in Mosul in June 2015. they do from the authorities. and corruption . . . . No person is of “Infidel” (Free Press, 2007) and
4. The rise of modern Islamic No fewer than 40 out of 57 Perhaps not surprisingly, Islamic born homosexual, just like no one “Heretic: The Case for a Muslim Ref-
extremism has worsened the intol- Muslim-majority countries or terri- extremists condemn homosexuality is born a thief, a liar or murderer. ormation” (HarperCollins, 2015).
Making Finance Work for Europe’s Smaller Companies

By Xavier Rolet years. And because these smaller they need to grow and become the Long-term financing allows compa- am delighted that Mr. Hill has sup-
T
firms have succeeded through major European job providers of nies the time and space to inno- ported our new report.
he European Central Bank’s their ability to innovate and grow, tomorrow? Much has been written vate, invest, grow and create jobs. The economic potential of eq-
corporate-bond-buying pro- offering new services or imagining about income-, social- and age in- There is a vast amount of equity fi- uity financing is clear. Companies
gram is useful for blue-chip more efficient ways to provide ex- equality. Our report highlights a nancing potentially available who raised capital on London
corporations that use cheap debt isting services, the jobs they cre- less-obvious type of inequality: throughout Europe, but for growing Stock Exchange’s growth stock
to service their obligations. But it ate are usually higher skilled and capital inequality, or the prefer- companies, there are too many bar- market, AIM, instead of borrowing
does nothing to support the only higher paid. These companies ence for debt over share equity. riers to accessing it. from the banks, created 731,000
type of company in Europe that count more than 4,000 patents and Over the past 40 years, just jobs, paid £2.3 billion ($3.28 bil-
can drive economic growth and trademarks between them. one of the 100 most successful lion) in taxes and contributed £25
create high-quality jobs. Our report shows that many Rather than encouraging global start-ups has come from billion to the U.K.’s GDP alone. As
In “1,000 Companies to Inspire SMEs can grow both employment Europe—while more than 25% part of our proposed merger with
Europe,” a report published by and revenue at exceptional rates. more debt via quantitative have come from California alone. Deutsche Boerse AG, platforms
London Stock Exchange on Just a small number of these com- easing, create more equity- It’s no coincidence that in Europe such as AIM that support dy-
Wednesday, we identify for the panies, often called ”gazelles,” can 80% of financing for SMEs still namic, growing businesses will be
first time the most dynamic and have a disproportionate impact on financing options. comes from banks, with only 20% maintained and built upon
fastest-growing of these small- economic output. coming from equity. In the U.S., throughout Europe.
and medium-size companies, and A 1% increase in the number of the opposite is true. If Europe is to have a sustain-
emphasize the importance of eq- high-growth businesses can add Debt is a short-term fix. It’s not That’s why European Commis- able economic future, it has to
uity financing in helping these 2% to gross domestic product. designed to help innovative com- sioner Jonathan Hill’s plan for a support new companies, new
companies grow. That’s a huge multiplier. By con- panies that need all their financial Capital Markets Union throughout ideas, new jobs and a new funding
The small- and medium-size trast, blue-chip firms have cre- capital to grow and invest rather Europe is so important. Such a model. Only innovative companies
companies identified in this report ated no net new jobs since before than to help service debt. union would break down barriers can create the high-quality, well-
have a compound annual average the financial crisis, focusing in- We must unleash the power of and simplify access to multiple paying jobs of tomorrow. But they
growth rate of 71%, with the top stead on cost cutting and emerg- equity financing, where people seek sources of financing throughout need access to deep pools of fi-
100 growing at more than 400% in ing markets rather than European investment to grow their business the European Union and make it nancing to do it.
the past three years. Job creation expansion. through individual investors. This easier, less expensive and less bur-
is astounding, boasting a 66% rate So how do we give these dy- includes capital markets, crowd- densome to access financing from Mr. Rolet is the CEO of London
of job growth over the past two namic, innovative SMEs the tools funding and peer-to-peer platforms. both within and outside the EU. I Stock Exchange Group.
Trump Plays the Radical Islam Card

“I have never made On Sunday morning, the nation At 1:59 p.m. it was the presi- asked whether her failure to use cent when Mr. Obama uses a
but one prayer to awoke to the news that nearly 50 in- dent’s turn. the phrase “radical Islam” was a shooting to justify his call for gun
God, a very short nocent people had been murdered by Though he did call the slaughter sign she had a weak policy. Back control. And where was Mr. Rem-
one: ‘O Lord, make a gunman at Pulse, a gay nightclub at Pulse an “act of terror,” anyone then she ducked, but post-Orlando nick when Mrs. Clinton tweeted
my enemies ridicu- in Orlando, Fla. Soon they would relying on Barack Obama for a read Mr. Trump has successfully forced that “Bernie Sanders prioritized
lous.’ And God learn the shooter was 29-year-old of the situation would have had no the issue. So on Monday Mrs. Clin- gun manufacturers’ rights over the
granted it.” Omar Mateen, born in America to idea that the killings at a Florida ton answered by declaring she is parents of the children killed at
MAIN
The author is parents of Afghan origin. nightclub might have been inspired “happy to say” either “radical ji- Sandy Hook”?
STREET
Voltaire but it In other words, a heavily-armed by the same ideology behind the hadism or “radical Islamism.” Leave aside that the term “radi-
By William
could be Donald man with Afghan parents and a forces still confronting American cal Islam” itself marks a distinction
McGurn
Trump. Because in Muslim name had targeted a gay troops in Afghanistan and Iraq. between violent jihadists and
this election year, nightclub for his bloody rampage. Now ask yourself: Does this un- The GOP candidate forces peaceful Muslims. The greater irony
the people who most object to Mr. And yet as the American people dermine the Trump message or fuel Hillary Clinton to address here is that Mr. Trump and Mrs.
Trump appear to be doing the watched those Sunday press confer- it? Clinton may not be as far apart as
most to boost his popularity. Their ences on their TV sets, they were On Monday, after a security language she has avoided. may appear on Islamic State.
latest contribution comes as Amer- treated to a parade of officials, in- briefing, President Obama conceded Both emphasize an air war:
ica is still reeling from the Islamic cluding the obligatory imam, all re- the shooter was “inspired by vari- While Mr. Trump says he would
State-inspired massacre at an Or- luctant to connect the killer with ous extremist information” online. But she added an inadvertently bomb Islamic State oil fields, Mrs.
lando nightclub. anything suggesting Islam. His sole reference to what this telling point: Those pushing the Clinton embraces the Obama fic-
might be was a line about the “per- language about radical Islam, she tion that we can do the job with a
versions of Islam that you see gen- suggested, are trying to “demonize few Special Forces and a good
erated on the internet.” and demagogue and declare war on bombing campaign. Neither ad-
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Characteristically Monday found an entire religion.” dresses the hard truth that defeat-
Mr. Trump repeating his call for a Mr. Trump, of course, has found ing Islamic State will require a
Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp temporary ban on Muslims. Let’s himself quite frequently on the de- much greater U.S. commitment,
Gerard Baker William Lewis stipulate this call is all his critics monized end of the stick. Only a probably including more ground
Editor in Chief Chief Executive Officer and Publisher say it is: overly broad and not well month or so ago, he was commonly troops.
Rebecca Blumenstein, Matthew J. Murray DOW JONES MANAGEMENT:
thought out, given, for example, likened to Hitler. So it was no sur- Even so, at least for now, Mr.
Deputy Editors in Chief Ashley Huston, Chief Communications Officer; that to defeat the Islamists making prise that on Sunday, even as the Trump benefits. His language on
DEPUTY MANAGING EDITORS: Paul Meller, Chief Technology Officer; war on America we will need the bodies of the dead in Orlando were Muslims and the Middle East may
Mark Musgrave, Chief People Officer;
Michael W. Miller, Senior Deputy;
Edward Roussel, Chief Innovation Officer;
full assistance both of Muslim na- still being removed, the New Yorker be crude and unnuanced. But it’s
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, Operations; Jennifer J. Hicks, Anna Sedgley, Chief Financial Officer; tions and individual Muslims, not posted a David Remnick story with not hard to understand its popular
Digital; Neal Lipschutz, Standards; Alex Martin, Katie Vanneck-Smith, Chief Customer Officer least Muslim Americans. this headline: “Donald Trump’s Ex- appeal when set against a presi-
News; Ann Podd, Initiatives; Andrew Regal, Video;
OPERATING EXECUTIVES:
But Mr. Trump’s comments are ploitation of Orlando.” dent and his secretary of state
Matthew Rose, Enterprise; Stephen Wisnefski,
Professional News; Jessica Yu, Visuals Jason P. Conti, General Counsel; not received in a vacuum. They Notwithstanding Mr. Remnick’s who almost always invoke Islam
Paul A. Gigot, Editor of the Editorial Page;
Nancy McNeill, Corporate Sales; come in the context of an Obama claim that it “feels indecent on only when it’s time to lecture their
Steve Grycuk, Customer Service;
Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International;
administration and a Hillary Clinton such a day to engage these com- fellow citizens about anti-Muslim
WALL STREET JOURNAL MANAGEMENT: DJ Media Group: campaign that, 15 years after al ments of Trump’s at all,” the tone bigotry.
Trevor Fellows, Head of Global Sales; Almar Latour, Publisher; Kenneth Breen, Qaeda hijackers flew civilian airlin- suggests it felt pretty good. The Mr. Trump often complains
Chris Collins, Advertising; Commercial; Edwin A. Finn, Jr., Barron’s;
Suzi Watford, Marketing and Circulation; Professional Information Business:
ers into buildings in New York and particular indecency in question about how unfairly he’s treated by
Joseph B. Vincent, Operations; Christopher Lloyd, Head; Washington, still have trouble ac- was a Trump tweet saying the his critics. If he understood what
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head knowledging radical Islam as a mo- mass murder in Orlando had folks such as Mr. Remnick are do-
EDITORIAL AND CORPORATE HEADQUARTERS: tivating force. proven him right about the Islamist ing for him, he’d put them on the
1211 Avenue of the Americas, New York, N.Y., 10036 At a Democratic presidential de- threat to Americans. payroll.
Telephone 1-800-DOWJONES
bate in November, Mrs. Clinton was Funny how no one finds it inde- Write to mcgurn@wsj.com.
SPORTS
Court Hands Potential Boon to Anti-Dopers

Release of blood day as Fuentes’s sentence, out- public is unclear.”
raged the sports community Giovanni Malagò, chairman
samples ordered in and appeared to mark a setback of Italy’s Olympic Committee,
‘Operation Puerto’ in the fight against perfor- said: “We’ll do everything possi-
mance-enhancing drugs. The ble to shed more light on these
doping case World Anti-Doping Agency, sacks of blood.”
known as WADA, the Interna- Dr. Fuentes said during his
BY RICHARD BOUDREAUX tional Cycling Union, the Span- 2013 trial that he had worked
ish Cycling Federation and It- with competitors in several
MADRID—A Spanish court aly’s Olympic Committee sports. But because the Spanish
ruled Tuesday that more than appealed the order. investigation focused on cy-
200 bags of blood drawn from In its ruling Tuesday, the cling, the trial judge didn’t re-
high-level athletes and later provincial court said it “took quire him to identify anyone but
seized in a Spanish doping into account that the goal is to cyclists. More than 50 cyclists
case should be turned over to fight against doping, which goes were publicly linked to the case.
international sports authori- against sports ethical values.” Spanish officials joined in
ties for investigation, revers- Destroying the blood bags voicing relief over Tuesday’s
ing a judge’s order to destroy would have tempted other ath- ruling and said they would
them on grounds of privacy letes to dope themselves, the study possible joint investiga-
PETER DEJONG/ASSOCIATED PRESS

protection. court said, “and sent a negative tions with the sports bodies
The World Anti-Doping social message that the end jus- that prevailed in the case.
Agency welcomed the ruling tifies the means.” The order to destroy the
and said it would study whether The ruling will give the four blood bags had hurt Spain’s rep-
it and other sports bodies could appellants access to the blood utation and was cited in a re-
legally use the blood samples to samples. port by the International Olym-
identify and discipline athletes WADA’s president, Sir Craig pic Committee as it evaluated
who have taken performance- Reedie, said the agency’s law- Madrid’s bid for the 2020 Sum-
enhancing drugs. yers would study how a global mer Olympic Games. Madrid
Tuesday’s ruling was the lat- Jan Ullrich, right in 1998, was one of the cyclists suspended in connection with the doping network. statute of limitations would ap- was a finalist in the bidding but
est twist in a 10-year-old case ply to any investigation. He said lost out to Tokyo.
that revealed a doping network boxers, soccer players and ten- 2006 after police raided his Ma- pealed arguing that he had bro- an eight-year statute for doping Spain now has an antidoping
involving a Spanish sports doc- nis players who worked with drid apartment and seized ana- ken no law. cases was in place in 2006 statute but, because the country
tor and some of the world’s top the doctor and could poten- bolic steroids, blood-transfusion Tuesday’s ruling by the Ma- when the blood bags were was unable to form a govern-
cyclists, a number of whom, in- tially be exposed. equipment and blood bags la- drid Provincial Court also re- seized and the period was re- ment after elections last Decem-
cluding 1997 Tour de France Operation Puerto, as the case beled with code names. versed Dr. Fuentes’s conviction. cently extended to 10 years. ber, parliament couldn’t make
winner Jan Ullrich, were subse- is known, has been closely In 2013, a trial judge con- The court said the blood sam- “While today’s court deci- legal updates required by WADA
quently suspended from the watched by the international victed him of endangering pub- ples couldn’t be considered sion is welcomed, it raises le- this year to conform with a
sport. Although only cyclists sports community’s antidoping lic health for systematically medication because doping gal questions we don’t know global code. As a result, WADA
have been publicly linked to the enforcers, causing embarrass- transfusing the blood into ath- wasn’t illegal under Spanish law the answer to,” he said. “I cer- suspended the accreditation of
case, some of the blood sam- ment for Spain. letes to enhance their perfor- at the time of his arrest. tainly hope the blood samples the Madrid drug-testing lab.
ples, now frozen in a Barcelona Its central figure, Dr. Eufemi- mance. He was given a one-year The judge’s order to destroy will be studied. Whether or —Eric Sylvers contributed
lab, are believed to be from ano Fuentes, was arrested in suspended sentence, but he ap- the blood bags, issued the same not we can make anything reporting from Milan.
tained around 40 Russian fans downtown Vieux Port area of

attempting to travel from Mar- Marseille. The speed of the ac-
Brazil Dumps Dunga Wednesday’s Lineup
Heard on the Pitch seille to Lille, where their team
will play against Slovakia
Wednesday. “We must stop
tions left police unable to detain
any perpetrators.
UEFA called its punishment
After Latest Debacle
Brazil’s football confederation
fired national coach Dunga on
VS.
these hooligans from causing of Russia a “suspended disquali- Tuesday in the wake of the Russia vs. Slovakia
Lille, 3 p.m. CET
Russian Team Put on Notice Over Fan Violence harm,” French Interior Minister fication,” which means the team’s elimination from the
Bernard Cazeneuve told lawmak- team’s remaining games could Copa America in the U.S.
MARSEILLE, France—French at a match here Saturday. ers in parliament. be considered automatic forfeits Gilmar Rinaldi, the team’s
VS.
authorities and European soc- UEFA, which is responsible With a terror threat hanging if there are repeat disturbances. general manager, was also fired.
cer’s governing body took steps for security inside the 10 Euro over Euro 2016, UEFA bolstered The Russian Football Union Brazil, which was shockingly
Romania vs. Switzerland
Tuesday to stop the violence 2016 stadiums, fined the Rus- security around stadiums and said it “accepted the [UEFA] routed 7-1 by Germany in the Paris, 6 p.m. CET
casting a shadow over the Euro sian Football Union €150,000 French authorities deployed tens verdict, though it considers it ex- 2014 World Cup semifinals on
2016 soccer tournament, detain- ($168,000) and said that the of thousands of police. ceedingly harsh,” according to a home soil, failed to get past the
ing some Russian fans and team would be expelled from But those preparations didn’t statement on its website. The group stage after drawing with VS.
threatening to disqualify the the tournament if its fans prevent 150 Russians from union called on fans to refrain Ecuador, beating Haiti and losing
country’s national team. cause any more disturbance in- mounting what local prosecutors from violence. 1-0 to Peru, which won on an France vs. Albania
The moves follow clashes be- side a stadium. called “hyper-fast, hyperviolent” —Joshua Robinson uncalled handball. Marseille, 9 p.m. CET
tween English and Russian fans Meanwhile, French police de- attacks on rival fans in the and William Horobin —Associated Press
Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-15 1 2 3 4 5 6 7 8 9 10 11 12 13 64 Classified word 28 Person who
-10 might finish off
14 15 16 65 Figs. with two
Riga -5 a hero
ow
Glasgow hyphens
0
C p h g
Copenhagen
osco
Moscow 17 18 19 Down 30 “Hit Me Up”
5
singer Farrell
10 20 21 22 1 Youngest of the
15 Bennet sisters 31 Harlem sights
Dublin
D bli Berlin 23 24 25 26
A d
Amsterdam rsaw
Warsaw 20 in “Pride and 32 Join the crew
25 27 28 29 Prejudice” 33 They might be
L
Lond
London 30
Brussels Frankfurt
k e
Kiev 2 Brings home mentioned on
Prague 35 30 31 32 33 34 35
3 City south of DVD cases
Munich
i h
Paris 36 37 38 39 the Snake River 34 Bad thing to
Vienna
V Warm
Budapest
d Canyon be in
Geneva 40 41 42
Cold 35 USNA grad
4 Factor of a
Milan Bucharest
h 43 44 45 prime number
Stationary 37 Ache
46 47 48 49 50 51 52 5 Nimble 38 “Mayday!”
Showers
Rome 53 54 55 56
6 Player in black, 39 Comfortable
Madrid
d id b
Istanbul
Rain orange and white situation
57 58 59 7 Book before
Lisbon
T-storms
43 Moved
60 61 62 Joel confidently
Al i
Algiers T i
Tunis Athens
Ath
Snow 8 Only tree that 44 Backup drives
63 64 65
can be turned 45 Butterfly, e.g.
Flurries into itself?
Rabat
b
46 Produce cross
Ice AFTERGLOW | By Jacob Stulberg 9 Not safe words?
Global Forecasts Today Tomorrow Today Tomorrow Across 27 Full of vigor 46 •Draw attention 10 “And Then There 47 Brand with
City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W Were None”
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Jared of “Dallas 29 Horror movie to the old slogan
Geneva 19 11 t 17 11 r Ottawa 28 13 s 26 12 pc multitude
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 39 25 pc 30 25 sh Paris 18 11 t 19 12 t Buyers Club” sounds 50 Imminent “More Bounce to
Havana 31 23 pc 32 23 pc Philadelphia 29 19 pc 27 16 r 5 Qatar’s capital 30 Frozen treats danger 11 Consigliere’s the Ounce”
Today Tomorrow Hong Kong 33 29 t 31 28 t Phoenix 39 24 s 39 23 s group
City Hi Lo W Hi Lo W 9 Don Draper, e.g. 32 Bird that can 53 Begin to annoy 48 Nomad’s goal,
Honolulu 29 23 c 28 23 pc Pittsburgh 29 21 t 28 17 t
Amsterdam 19 12 t 20 13 t Houston 33 24 pc 34 22 pc Port-au-Prince 37 21 pc 37 21 pc carry an 54 Home of 12 Modify formally perhaps
14 “Bo-ring!”
Anchorage 22 13 s 23 13 pc Istanbul 26 20 s 28 21 s Portland, Ore. 18 10 c 18 8 pc elephant, per Utah Valley 13 Like the Valkyries 49 Yodels look-alikes
Athens 30 21 s 32 23 s Jakarta 32 25 t 31 24 t Rio de Janeiro 24 16 s 24 16 s 15 Psyche’s love Marco Polo University
Atlanta 31 24 t 35 23 pc Johannesburg 19 7 s 20 5 s Riyadh 42 27 s 43 26 s 18 Triangular snack 51 1990 winner of
16 Words on 33 Pay dirt 56 Org. sponsoring golf’s U.S. Open
Baghdad 44 26 s 42 25 s Kansas City 36 22 s 36 23 s Rome 26 19 s 29 18 pc 22 Colorful bands
Baltimore 27 19 t 28 17 t Las Vegas 35 22 s 34 21 s Salt Lake City 32 15 s 25 17 s Venezuelan contents piece talks? 52 Pool divisions
Bangkok 35 27 pc 35 27 t Lima 23 16 pc 22 16 pc San Diego 20 17 pc 21 17 pc valentines 24 “Frozen”
Beijing 31 17 pc 35 21 pc London 19 11 t 18 12 t San Francisco 19 12 s 21 12 pc 36 Beatles song, 57 Maker of snowman 55 Squeezed (out)
17 •Salt cod, e.g. or what both Expression
Berlin 19 12 r 22 15 pc Los Angeles 23 13 pc 23 13 pc San Juan 33 25 s 32 25 s 58 Brains of a PC
Bogota 17 8 r 18 8 c Madrid 22 10 pc 22 10 pc Santiago 18 4 pc 20 6 pc 19 Olympics halves of the printers 26 Request for
Boise 20 10 sh 19 8 s Manila 34 26 pc 34 26 t Santo Domingo 32 23 pc 32 22 pc decathlete starred answers Friskies, perhaps 59 Salon options
Boston 26 16 pc 24 15 pc Melbourne 16 8 s 14 11 c Sao Paulo 20 10 pc 21 11 pc
58 •Consume
Johnson might say reluctantly
Brussels 18 11 t 20 12 t Mexico City 22 12 t 24 13 t Seattle 18 10 c 19 9 pc Previous Puzzle’s Solution
Buenos Aires 16 4 pc 14 4 pc Miami 32 25 t 32 25 t Seoul 25 19 t 25 19 c 20 Lodge kin 40 Ninny 60 Hamlet’s “A little P A C E F A I T H C O P
Cairo 37 22 s 35 21 s Milan 24 17 t 23 15 t Shanghai 32 21 sh 27 21 c 21 Platte River I D O L S A L O H A L I E
Calgary 18 4 s 14 6 pc Minneapolis 26 15 c 25 17 pc Singapore 31 26 t 31 25 t
41 In need of more than kin, C A P I T O L B U I L D I N G
Caracas 32 25 pc 31 25 pc Monterrey 37 21 pc 37 22 pc Stockholm 20 9 pc 17 9 r people replenishing and less than A G E AW L S S T I C K S
kind,” e.g. S E D A T E S S L I N K
Charlotte 31 23 t 34 24 pc Montreal 27 15 s 24 13 s Sydney 20 10 s 20 13 pc 22 March 42 Gasps or R U N C O I N H B O
Chicago 32 19 t 26 16 pc Moscow 23 17 c 25 17 c Taipei 35 26 pc 35 26 pc alternatives grimaces, say 61 Pig’s place? A C H E S G O L F G R E E N
Dallas 35 25 pc 36 26 s Mumbai 35 29 sh 34 29 pc Tehran 33 20 s 35 24 s L O O N C L O V E A R E A
Denver 32 14 s 32 14 s Nashville 33 24 t 37 22 pc Tel Aviv 33 22 s 28 22 s 23 Regarding 43 Ring up, in a way 62 Floppy-eared S E MA P H O R E S T E R N
O D E R E B S P I E
Detroit 27 19 t 26 17 r New Delhi 38 28 t 39 28 s Tokyo 25 21 pc 24 22 r 25 •It may have a 45 Celia Cruz comics character SW I S S R E D R A F T
Dubai 39 28 s 41 30 s New Orleans 33 26 t 34 26 pc Toronto 24 17 pc 21 15 pc A T T E S T P O L L S L R
Dublin 17 11 t 16 9 sh New York City 29 19 pc 24 17 c Vancouver 17 9 c 18 9 pc wire frame specialty 63 Greets the day D A Y T O N A S P E E D W A Y
Edinburgh 14 9 sh 13 8 r Omaha 35 20 s 35 22 s Washington, D.C. 28 21 t 29 18 t E L L N U R S E D R A G S
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s
Frankfurt 19 11 t 20 13 t Orlando 34 24 t 33 24 t Zurich 18 11 t 18 10 r N E E S T E T S I N S T

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BUSINESS & TECH.

INSIDE:
MONEY &
INVESTING
Computer Maker for Sale SEC Staff Backs
New Exchange
Creator of $5 product sells for $880 million BUSINESS NEWS | B2 MARKETS | B7
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, June 15, 2016 | B1
Takata Looks to Sell Auto Shares Beleaguered Japanese auto- roughly $90 million. It isn’t bags in the U.S. alone. The Japanese automotive
Firms Keep
Perks Even
parts maker Takata Corp. is
planning to sell shares it owns
in car makers amid mounting
clear when Takata plans to un-
load the shares or how much
money it will ultimately raise
Expected gains from the
share sales would help pad
Takata’s balance sheet in the
supplier as of the end of
March 2015 owned more than
2.2 million shares of Honda
After Move
By Mike Spector
in New York and Megumi
from the share sales.
The move comes after a
Takata steering committee in
short term as it grapples with
financial losses from the
mushrooming recalls. The
Motor Co., its largest cus-
tomer, according to the com-
pany’s most recent annual
From U.S.
Fujikawa in Tokyo May hired Lazard Ltd. bank- company also faces possible report. BY RICHARD RUBIN
ers to seek a cash infusion damages from widespread Takata also owned shares
costs from recalls of defective and negotiate with auto mak- lawsuits and could receive of Toyota Motor Corp., Nissan Companies that lowered
TORU HANAI/REUTERS
air bags linked to at least 11 ers on ballooning costs from another hefty financial pen- Motor Co., Suzuki Motor their tax bills after turning in
deaths and more than 100 in- recalls of tens of millions of alty depending on the out- Corp., Mazda Motor Corp., their American passports are
juries world-wide, said a per- air bags that risk rupturing come of a U.S. Justice Depart- Mitsubishi Motors Corp. and still finding perks from their
son familiar with the matter. and spraying shrapnel in ve- ment criminal probe. Takata Subaru owner Fuji Heavy In- former citizenship.
Takata’s ownership stakes hicle cabins. Auto makers are has said it is cooperating dustries Ltd., according to One company was cele-
Takata’s losses have mounted. are currently valued at recalling nearly 70 million air with government officials. the report. brated at a U.S. embassy. Some
traveled the world with U.S.
officials, promoting products
Attention Shoppers: Yoga in Aisle 3

with the imprimatur of the
American government despite
moving their legal headquar-
ters outside the U.S. and cut-
U.S. grocers offer fitness classes, facials, child care to lure consumers into stores and away from online rivals ting their taxes. Still others
continue to receive U.S. gov-
BY HEATHER HADDON ernment contracts.
Medtronic PLC, which ac-
HANOVER TOWNSHIP, N. J.— quired Dublin-based Covidien
Shoppers looking to pick up and moved its address from
milk and eggs may have other Minnesota to Ireland in Janu-
reasons to spend time at their ary 2015, sent executives on
local supermarket: yoga classes Commerce Department trade
or a spa treatment, perhaps. missions to Brazil in August
Under growing pressure and to Peru in March of this
from discounters and online ri- year. Ingersoll Rand PLC par-
vals, supermarkets are trying to ticipated in a trade mission to
transform themselves into Turkey, years after it put its
places where customers might address in Ireland. Aon PLC,
want to hang out rather than the insurance broker and hu-
just grabbing groceries and man-resources firm that
heading home.
In Phoenix, a Fry’s Food
Stores outlet, part of a chain
There is little
owned by Kroger Co., features a clarity about what it
ANDREW LAMBERSON FOR THE WALL STREET JOURNAL
culinary school and a lounge

with leather couches perched
means to be an
next to a wine bar. A Kroger American company.
store in Hilton Head Island, S.C.,
offers a cigar section to comple-
ment its wine cellar that stocks moved from Chicago to Lon-
$600 bottles. don in April 2012, celebrated
Whole Foods Market Inc. its success in the Romanian
has a putting green outside its market at the U.S. Embassy in
Augusta, Ga., location and a spa Bucharest later that year at a
offering peppermint foot scrubs reception hosted by the U.S.
and facial waxing in a Boston ambassador.
store. Elsewhere, it has bike-re- Their cases show that out-
pair stations. side the tax sphere, there is lit-
A ShopRite store here in Ha- A ShopRite in Morristown, N.J., which opened in 2013, offers fitness classes, top, and an oyster bar to attract shoppers. tle clarity about what it means
nover Township, near New to be an American company,
York, runs a fitness studio with classes, shop and come home also face competition from on- what benefits attend that sta-
yoga, barre and Zumba classes for the kids,” she said. line grocery services such as tus and who is entitled to en-
and has a cosmetologist on Supermarkets have long fea- Amazon.com Inc.’s Amazon- joy them.
weekends. tured bank branches and dry Fresh. Jefferies Group LLC esti- “If there are competing
“You can’t do fitness online,” cleaners, but transforming mated last month that online companies that have main-
said John Sumas, chief operat- them into village-like destina- grocery sales could grow to 8% tained their U.S. tax status,
ing officer of Village Super tions is a newer experiment. of grocery sales in 2025 from that are acting responsibly in
Market Inc., a member of the Most enhanced stores appear to 2.5% today. Moreover, there are their taxpaying behavior, then
Wakefern Food Corp. coopera- be located in affluent suburbs threats from European deep- policy makers should be asking
tive that includes ShopRite. and city neighborhoods—where discount supermarkets such as questions about why these
“Getting a significant amount of shoppers are more inclined to Aldi and Lidl as they expand companies aren’t being pro-
people to show up to a building order groceries online or meals their U.S. presence. moted instead of the invert-
is a value in itself.” from services such as Blue “Every executive I’ve talked ers,” said Matt Gardner, execu-
Village Super Market’s oper- Apron. to has said this is the most pro- tive director of the Institute on
ating income was $44 million in “It gives our stores that found period of gro- Taxation and Economic Policy,
the fiscal year ended last July, hangout factor,” said Jeff Tur- cery changes they’ve seen. The a group arguing against re-
up $30 million from fiscal 2014. nas, president of 365 by Whole competitive space is much more gressive tax policies.
Its stock was $28.04 at 4 p.m. Foods Market, the grocer’s new intense,” Mr. Vitaro said. Legally, there are few differ-
on Monday, up 6.4% year to smaller-store format that made LLP’s consumer-products prac- entire grocery sector, and even At Whole Foods’ 365 stores, ences among recently departed
date. its debut in the Silver Lake sec- tice. “There are a lot of smart trendy chains such as Whole outside vendors lease space as companies such as Aon and
Ana Soriano, a 51-year-old tion of Los Angeles last month. retailers out there, and I’m not Foods are struggling to differ- part of a program to offer novel Medtronic, longstanding for-
stay-at-home mom from Morris Not everyone, however, is aware of anyone who says, ‘let’s entiate themselves as Wal-Mart foods and services. Thousands eign companies such as Sie-
Township, N.J., at first thought sold on this idea. add 20 yoga studios.’ ” Stores Inc. and other big-box have applied to open in one of mens AG and companies such
the idea of exercise classes at “I’m pretty cautious on it,” Still, there is pressure to try retailers expand natural and or- the 19 stores in nine states the as Anheuser-Busch InBev NV,
ShopRite was “weird.” Now said Richard Vitaro, a director in new approaches. First quarter ganics sections. Austin-based company has created through a foreign com-
she’s a regular. “I finish my the consulting firm AlixPartners profits were weak for nearly the Traditional supermarkets Please see SHOP page B4 Please see TAX page B2
Male CEOs Provide Why Microsoft Put Its Chips on LinkedIn

Insights on Balancing
Work and Family Life M
icrosoft Corp.’s But this deal can succeed
planned acquisition where the others failed.
of LinkedIn Corp. Here’s why.
potentially is a very savvy There is real synergy be-
move, though you would be tween the companies and
BY RACHEL FEINTZEIG sumer products and law, The hard-pressed to discern that. their products, particularly
Wall Street Journal found that There are lots of reasons Microsoft’s Office productiv-
Work-life balance isn’t a male chiefs are actively seeking for skepticism. The price tag, ity suite—now delivered pri-
women’s issue. But it often a semblance of balance in their for one. At marily online—and
RAJAT GUPTA/EUROPEAN PRESSPHOTO AGENCY
feels that way. personal and professional lives. $26.2 billion, LinkedIn’s core database of
PepsiCo Inc. Chief Executive Some bosses nodded at the fact it is by far more than 400 million
Indra Nooyi and Facebook Inc. that their jobs are all-consum- Microsoft’s mostly professional profiles.
Chief Oper- ing, with most home and child- largest acqui- As Microsoft Chief Execu-
MANAGEMENT ating Offi- rearing duties borne by their sition ever. tive Satya Nadella told The
cer Sheryl spouses. Others say they man- KEYWORDS The size Wall Street Journal, “It’s re-
Sandberg age to fit family into packed CHRISTOPHER alone is a rea- ally the coming together of
talk openly—and are asked fre- schedules, but it takes work. MIMS son for cau- the professional cloud and
quently—about how they rose Many older executives said tion, given the professional network.” In
to the top while maintaining they felt conflicted about miss- the sorry his- other words, we now work
active family lives. Yet men, ing family life while climbing tory of such large deals. by toggling between our pro-
who hold the top jobs at most the corporate ladder, adding Then, there is Microsoft’s ductivity software and our
large companies, rarely open that they are trying to change own checkered history with social networks. But why Microsoft Chief Executive Satya Nadella has said that LinkedIn
up about juggling jobs, children their ways—partly to set an ex- acquisitions. It has recorded should the two be separate? will be allowed significant autonomy after the acquisition.
and family. ample for employees rising in write-downs exceeding the Mr. Nadella is betting that
“Men never get asked about the ranks behind them. $9.4 billion it paid for the were these two concepts re- work with which users iden- amounts of data they throw
work-life balance,” YouTube “Your kids are only young handset unit of Nokia Corp. conceived today, they would tify. Microsoft needs to per- off, could yield insights and
boss Susan Wojcicki, a mother once, and you can’t get that in 2014. Earlier deals for be one. suade LinkedIn users to products within Microsoft
of five, said at a Fortune con- moment back. If I have any re- Skype Technologies and LinkedIn’s users are, argu- adopt that identity, and use that allow it to monetize its
ference in December. grets it’s that one,” Dan Glaser, Yammer Inc., designed to ably, Microsoft’s core demo- it across as many Microsoft investment in LinkedIn in
Not until now, anyway. In in- the CEO of Marsh & McLen- bolster Microsoft’s digital graphic. They also offer Mi- products as possible. ways that the professional
terviews with 25 CEOs in in- nan Cos., said of the times he and social credentials, did crosoft something it has long Access to those users, as networking site might not be
dustries such as retail, con- Please see CEO page B5 little of either. sought but never had—a net- well as the enormous Please see MIMS page B3
B2 | Wednesday, June 15, 2016 THE WALL STREET JOURNAL.
INDEX TO BUSINESSES BUSINESS NEWS

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
A
Adidas ....................... B12
AdRoll .................... B1,B5
Airbus Group...............A4
Alibaba Group.............B3
F
Facebook......................B3
Fitbit............................B3
Ford Motor..................B4
G
Nokia...........................B1
1Malaysia
Development...........B11
Oracle.....................B1,B3
P
Computer Maker for Sale
Alibaba Group General Electric .......... B5 PepsiCo........................B1 Raspberry Pi supplier
Holding....................B12
Alphabet ................ B1,B3
General Motors...........B4 Petrobras .................... A4
Petron..........................B4
Premier Farnell agrees
Goldman Sachs...........B7
Amazon.com ............... B8 Goldman Sachs Platinum Partners....B12 to $880 million deal
Anheuser-Busch Premier Farnell...........B2
InBev.........................B1
Group.......................B11
PricewaterhouseCoopers with Swiss company
H .....................................B7
Aon..............................B1
Henderson Land Prologis ....................... B8
Apple .............. A10,B1,B3
Development.............B8 BY STU WOO
B S
Honda Motor...............B4
Barclays.....................B12 Hyundai Motor............B4 Salesforce..............B1,B3 LONDON—The English
Savills..........................B8 company that churns out one
Barrington Partners ... B7 I-J Sears Holdings............B8
BATS Global Markets.B7 IEX Group....................B7 Siemens.......................B1
of the world’s cheapest com-
BlackRock....................B7 Ingersoll Rand.............B1 puters, the $5 Raspberry Pi, is
Sports Authority ...... B12
Boston Properties.......B8 J.C. Penney............B1,B5 selling itself to a Swiss com-
Starbucks....................B7
C JD.com.........................B3 Stroock & Stroock & petitor for about $880 mil-
Chemours....................B4 K Lavan.......................B12 lion.
Choice Hotels Kayak Software.....B1,B5 Swire Properties.........B8 Swiss components supplier
International ....... B1,B5 KUKA...........................B4 T-U Daetwyler Holding AG said
Cushman & WakefieldB8 L Takata..........................B1 Tuesday that it agreed to ac-
Cvent......................B1,B5 Toyota Motor..............B4
Lazard..........................B1 quire U.K.-based electronics
D LinkedIn.......................B1 Twitter ........................ B5
distributor Premier Farnell
Lyft.........................B1,B5 23andMe......................B3
Daetwyler Holding......B2 PLC for £615 million, or 165
Uber Technologies .... B12
Daimler........................B4 M pence a share.
Delaware Investments V
Macy's.........................B8 The deal combines two Eu-
Dividend & Income Marsh & McLennan ....B1 Vanguard Group........B12
Fund .......................... B7 Veolia Environnement B4
ropean suppliers with roots in
Medtronic....................B1 the early 20th-century dawn
VMware..................B1,B5
SIMON DAWSON/BLOOMBERG NEWS

Deloitte & Touche.......B7 MetLife ................ B4,B12
Deutsche Bank..........B11 Vornado Realty Trust.B8 of modern electronics.
Microsoft.....................B3
Donfeng Nissan........B12 Midea Group ............... B4 W Premier Farnell dates to
Duke Realty ................ B8 Morgan Stanley........B12 Waddell & Reed the 1930s, when it sold radio
E N-O Financial....................B7 components. It built up a
eBay.............................B3 Newcrest Mining........B4
Wal-Mart Stores.........B8 booming catalog business in
Whole Foods Market..B1 the 1980s and 1990s, selling
EgyptAir......................A4 New World
Evergrande Real Estate Development.............B8 X cables, lighting products and
Group.......................B12 Nike...........................B12 Xerox ........................... B2 other electrical components to
companies and hobbyists.
INDEX TO PEOPLE In recent years, though, its

highest-profile contract was
to build and distribute the
Daetwyler Holding is buying the U.K.-based maker of the Pi Zero computer, which costs $5.
on computing and coding. Al- cottage industry around sell- in 1934, selling radio parts in
A G P Raspberry Pi. The product is phabet Inc.’s Google gave the ing accessories for it. a Chicago storefront under the
Aggarwal, Reggie ....... B5 Gelsinger, Pat ............. B5 Plaze, Robert ............ B12 an inexpensive and tiny com- foundation a grant to provide Premier Farnell reported name Newark Electronics. It
B Glaser, Dan..................B1 R puter designed by Raspberry 15,000 of its computers to U.K. £778.5 million in revenue for later merged with A.C. Farnell
Ballmer, Steve............B3 H Ristenpart, Bill ......... B11 Pi Foundation, a British non- schoolchildren. This past the fiscal year ended in Janu- Limited to become Premier
Bell, Aaron..................B5 Hafner, Steve..............B5 Rorsted, Kasper........B12 profit trying to make comput- weekend, Queen Elizabeth II ary. The division overseeing Farnell, based in the northern
Berg, Eric .................... B4 Hele, John...................B4 ers more accessible. knighted Raspberry Pi creator the company’s Raspberry Pi England city of Leeds.
Blass, David..............B12 T
Huberfeld, Murray....B12 It released its first product Eden Upton. operations reported £125.4 Adolf Daetwyler in 1915
C J Truell, Edmund............B9
in 2012 and now has four The products themselves million of that, or 16%. started working at a cable and
Caran, Allie ............... B11 Johnson, Ron .............. B5 U-V models. The least costly is the look like a credit-card-size cir- “By combining forces, we rubber factory in Altdorf,
Chadha, Gunit...........B11 Joyce, Steve................B5 Upton, Eden ................ B2 $5 Pi Zero, which made its de- cuit board. A user needs to significantly increase our Switzerland, before his family
Chase, Judith Ganes.B11 Vemuri, Ashok............B2
K but last year. The most expen- connect it to a power supply, competitiveness and extend bought and renamed the com-
Connor, James ............ B8
Cordero, Edgar............B7 Kabbaj, Youssef........B11 W sive are the Pi 2 and Pi 3, keyboard, mouse and monitor our product range, facilitating pany. It has evolved into an
Cosgrove, Delos..........B5 Kandarian, Steven....B12 Wade, Michael............B3 which cost $35 each. or TV. It uses the free Linux a one-stop shopping experi- industrial supplier of sealing
Cuevas, Jorge..............B7 M Weiner, Jeff................B3 The bare-bones device has operating system. In addition ence for our wide range of solutions for industries in-
D-F Ma, Jack......................B3 Welch, Jack.................B5 garnered buzz around the to making the device itself, customers from a multitude of cluding auto and health care,
Moghadam, Hamid ..... B8 White, Bruce...............B4 world for its price and what Premier Farnell, one of two li- industries,” Daetwyler Chair- and electronic components.
de Vaucleroy, Jacques B4
N Wu, Maggie.................B3 the foundation says is its po- censed distributors of the man Ulrich Graf said. —Rory Gallivan
Dick, Douglas..............B7
Drucker, Peter.............B4 Nadella, Satya ............ B1 Z tential to get children hooked Raspberry Pi, has built up a Premier Farnell got its start contributed to this article.
Frankel, Eric................B8 Nordlicht, Mark.........B12 Zarti, Mustafa .......... B11
Europe Strives to Play Xerox Names Business-Services CEO

BY DREW FITZGERALD
Broader Aviation Role AND ANNE STEELE
services operations.
The company has also
granted activist investor Carl
sales. As it turns out, the ma-
chines and service contracts
tied to them have given Xerox
headed global manufacturing
and engineering services at In-
fosys Ltd., where he worked
BY ANDY PASZTOR lei said in a speech. Xerox Corp. tapped former Icahn three seats on the new a steady stream of cash while for 14 years and was also a
Without mentioning specific iGate Corp. Chief Executive business-services company’s the outsourcing segment hit board member.
WASHINGTON—European airlines, he also said Turkey, Ashok Vemuri to lead its busi- board. unexpected hiccups. His total compensation
regulators are moving aggres- China and Mexico are among ness-services company after Xerox continues to search Mr. Vemuri was CEO of iG- package next year is worth
sively to negotiate agreements the countries the European the technology giant splits in for a new leader of its docu- ate—formerly a publicly $7.5 million, according to a fil-
with several Asian countries Union is targeting for such two later this year. ment-management businesses traded outsourcing company ing of his offer letter. He will
and two Persian Gulf states pacts. The commission is the Mr. Vemuri, 48 years old, which includes its traditional based in New Jersey—from be based for now in New Jer-
aimed at making Europe a executive arm of the European will become CEO of Xerox photocopiers. September 2013 to October sey, not far from Xerox’s Nor-
larger global aviation player. Union. Business Services LLC on July Company directors have walk, Conn., headquarters.
The escalating efforts, pri- Mr. Hololei emphasized that 1 and will also be an executive narrowed their search to two Last month, Xerox said Ms.
marily intended to benefit Eu- the goal is to give European vice president of Xerox until finalists and will choose the
Xerox announced in Burns, who has run the com-
ropean carriers by increasing aviation—which historically the separation. The business- winner “within a week,” ac- January plans to pany since 2009, will give up
their share of those markets focused much of its energy on services wing employs more cording to a person with that role after the split and
and others, were sketched out cultivating trans-Atlantic mar- than 100,000 people in areas knowledge of the situation.
break itself into two become chairman of the legacy
by a senior European Commis- kets—a larger international ranging from for-hire call cen- One of the two finalists for the companies. hardware business.
sion official here Tuesday dur- footprint. With the benefit of a ters to mass-transit software. legacy company CEO spot is Ms. Burns, 57, has spent her
ing an international safety U.S.-Europe open-skies agree- Xerox announced in Janu- an inside contender, this per- entire career at the document
conference. ment, traffic between those ary plans to break itself into son said. 2015. He sold the company to company, working her way up
Henrik Hololei, the commis- two regions has climbed about two companies, reversing an Xerox’s outsourcing units French computer-services and from an internship in 1980 to
sion’s top transportation offi- 18% in the past decade. effort by the century-old com- have been the source of much consulting company Capgem- become the first black woman
cial, said rapid passenger But the regulator predicted pany to marry business ser- of the company’s recent trou- ini for $4 billion last year. At to lead a Fortune 500 com-
growth in parts of Asia and the that in coming years, European vices with its copiers and bles, despite the effort of cur- the time of the acquisition, iG- pany.
Middle East is “shifting the carriers will be looking else- printers. Xerox plans to divide rent CEO Ursula Burns to use ate had revenue of about $1.3 The company aims to com-
center of gravity” for the en- where for new business. “We into separate publicly traded businesses in growing sectors billion, and about 33,000 em- plete the split by the end of
tire airline industry and the need to be actively present companies: one containing its like health care and informa- ployees, the majority of whom the year.
expanding carriers “will stay, where the growth is gener- document-management busi- tion technology to offset the were offshore. —Joann S. Lublin
and they will develop further.” ated,” he told the conference. nesses and another housing its document business’s declining Prior to iGate, Mr. Vemuri contributed to this article
As a result, European regu- In a brief interview, Mr.
lators and lawmakers want to Hololei said he was pleased
begin negotiating potentially
wide-ranging aviation pacts
with Qatar, the United Arab
Emirates and a number of
that Europe is bent on moving
ahead of the U.S. in forging
aviation agreements with
countries boasting fast-grow-
TAX from U.S. trade missions.
“We believe it’s in the U.S.
government’s interest to pro-
mote this country’s economic
Asian governments, Mr. Holo- ing carriers. Continued from the prior page benefits in other countries,”
pany’s purchase of a U.S. firm. said spokesman Fernando Viv-
ADVERTISEMENT All have their headquarters anco.
outside the U.S., and signifi- One of the earliest address
Legal Notices cant employment, leadership
and production inside; they
changes in the recent wave
was the move by Aon, which
differ only in how they got the the IRS said in 2013 allowed
PUBLIC NOTICES foreign address. the company to no longer be
U.S. lawmakers, particularly considered a domestic corpo-

Democrats, say the govern- ration for tax purposes. Aon
ment should penalize compa- executives said the change po-
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BLOOMBERG NEWS
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THE WALL STREET JOURNAL. Wednesday, June 15, 2016 | B3
TECHNOLOGY @wsjd | wsjd.com
Alibaba Forecasts
Strong Revenue
Alibaba Group Holding used it. But he added GMV
Ltd. released an annual reve- wouldn’t necessarily remain
nue forecast for the first time, the industry’s standard mea-
projecting a 48% increase for sure. “In our heart, we know
its fiscal year ending in March this isn’t really the only in-
dex,” he said.
By Juro Osawa in GMV refers to the total
Hong Kong and value of third-party sellers’
Eva Dou in Beijing transactions on the company’s
platforms and is distinct from
as the Chinese e-commerce Alibaba’s revenue. But GMV is
company seeks to alleviate in- tracked closely by investors
vestors’ concerns about its and analysts because it shows
growth prospects. how fast an e-commerce com-
While emphasizing its reve- pany is growing relative to
nue outlook, Alibaba execu- competitors.
tives played down another The way Alibaba calculates
metric called gross merchan- GMV has been controversial,
dise volume, or GMV, which analysts say, because different
often has been used by the companies define it differ-
SHAILESH ANDRADE/REUTERS
company and its rivals to mea- ently. Alibaba and its rivals
sure the growth of e-com- also tally transactions regard-
merce transactions. less of whether they have been
Alibaba faces a U.S. investi- paid for, such as items shipped
gation into its accounting for payment on delivery, which
practices, and its GMV figures means the number can include
have come under scrutiny the value of goods later can-
from investors. celed or returned. A man reads a newspaper in Facebook’s new office in Mumbai in May. The company collects data on about 1.6 billion people.
Mr. Ma said investors have
Facebook Shares Methods

demanded different measures
through the years from Ali-
baba including page views and
click rate, in addition to GMV,
which he said weren’t all good
measures of the company’s Company reveals manager and co-author of the their customers’ personal data. for research participants to
business. Alibaba’s true value paper published in Washing- Dealing with research eth- give scientists broad consent
lies in its commerce infra- how it vets research ton and Lee Law Review. ics is “definitely an emerging to use their data and tissue
structure, he said. projects amid concerns To assess the ethical impact field that everyone in the in- samples for future studies.
CHEONG KAM KA/XINHUA/ZUMA PRESS
Alibaba also said Tuesday of each research effort, the dustry is struggling with,” said But that regulation “doesn’t
that it will stop reporting its about privacy, ethics Menlo Park, Calif., company Joetta Bell, senior compliance apply to private companies
GMV every quarter. Instead, it has established a five-person program manager at Micro- such as Facebook, which don’t
will switch to reporting only BY DANIELA HERNANDEZ standing group of Facebook soft Corp., who led the ethical accept any federal research
its annual GMV each year. AND DEEPA SEETHARAMAN employees, including experts review board that the com- funds,” said Michelle Meyer,
To provide investors with in law and ethics. The company’s Microsoft Research arm the director of bioethics policy
more information for assess- Facebook Inc. published on pany declined to identify the launched in 2015. for the Clarkson-Icahn School
ing its performance, Alibaba Tuesday new details about members of the board. The amount of information of Medicine at Mount Sinai
said it would start disclosing how it conducts research us- If a manager determines Facebook collects on people en- bioethics program.
more detailed financial results ing the personal information it that a research project deals ables their researchers to study “Certainly, tech companies
Alibaba’s Jack Ma, in June. for different segments of its collects on Facebook users, with sensitive topics such as a “deeper and broader” cross- have not had IRBs,” which are
operations, including its online amid a flurry of efforts to cre- mental health, the study gets a section of the population than often regarded as bureau-
With the new forecast, Ali- marketplaces, cloud-comput- ate privacy and ethical stan- detailed review by the group ever before, said Jeremy Birn- cratic, said Duncan Watts, a
baba is expecting faster ing services, mobile media and dards for the corporate re- to weigh risks and benefits, as holtz, a communications pro- principal researcher at Micro-
growth than its 33% revenue entertainment. search involving human data. well as to consider whether it fessor at Northwestern Univer- soft Research. But that is
increase in the prior fiscal “This is a complex business Facebook collects data on is in line with consumers’ ex- sity who worked at Facebook changing, he said.
year. While part of the ex- to value,” Alibaba Chief Finan- about 1.6 billion people, in- pectations of how their infor- last year as a research fellow. Some, including gene-se-
pected increase in this year’s cial Officer Maggie Wu said. cluding “likes” and social con- mation is stored. Tech companies are increas- quencing company 23andMe,
top line is because of acquisi- She also said Alibaba’s deci- nections, which it uses to iden- Managers have the author- ingly hiring academics from hire an external IRB to vet the
tions, revenue excluding the sion to stop reporting quar- tify behavioral patterns such ity to simply approve propos- fields ranging from the life sci- majority of their research pro-
acquired companies still is ex- terly GMV figures doesn’t indi- as voting habits, relationship posals, according to 23andMe’s
pected to rise 36%, the com- cate any problems with its status and how interactions Vice President of research Joyce
pany said. figures. with certain types of content
Tech companies are grappling with how to Tung. Its review process has
Alibaba’s decision to release Last month, Alibaba said might make people feel. ensure the ethical conduct of research. been in place since about 2008.
a revenue forecast comes as U.S. regulators had asked it to In June 2014, Facebook pub- Microsoft and wearables
the company is grappling with provide details of its account- lished a study about a 700,000- maker Fitbit Inc. also contract
lingering questions about its ing for a delivery affiliate, its person psychological test to als that they deem more in- ences to artificial intelligence with external IRBs for some of
business outlook amid China’s operating data for the largest determine whether omitting nocuous. Which research gets to mine social-media data, in- their research projects. The
economic slowdown and inten- online shopping day of the content with words associated a full review is up to the dis- ternet searches, purchasing be- rest largely are reviewed in-
sifying competition from rivals year, and “related party trans- with positive or negative emo- cretion of the manager. havior and publicly available ternally. A subset of Fitbit’s
such as JD.com Inc. Mean- actions in general.” tions could alter mood. The The review group is mod- data sets to improve their research undergoes an ethics
while, the accounting investi- Last year, Alibaba disclosed survey sparked controversy eled on the institutional review products, place ads and track review described in a report
gation by the U.S. Securities GMV of $14.4 billion on Nov. about the company’s ethics. boards, or IRBs, that assess the health trends. Last week, for published in collaboration
and Exchange Commission, 11, China’s biggest online shop- In October 2014, Facebook ethics of human-subject re- instance, Microsoft published a with the Center for Democracy
which Alibaba disclosed last ping day, called Singles’ Day. had announced it was adding search at academic institu- study that suggests that search and Technology in May.
month, has added yet another The U.S.-listed company has an internal review process but tions. Facebook hired longtime queries could provide clues “Within the entire industry,
challenge. said in a regulatory filing that declined to divulge specifics. Stanford University IRB man- that a person might have can- there’s a lot of people doing ex-
At Alibaba’s annual investor it is cooperating with the SEC Because “the issues of how ager Lauri Kanerva, who co- cer, even before a diagnosis. periments, and there’s no visibil-
day on Tuesday, Executive on its inquiry. It also said it to deal with research in an in- wrote the paper, to oversee its Government officials are ity on how they’re doing it,” said
Chairman and co-founder Jack was told by the commission dustry setting aren’t unique to research review process. proposing changes to federal Fitbit’s vice president of research
Ma said his company started that the request for informa- Facebook,” the company de- The publication comes as policies that regulate human Shelten Yuen. “We wanted to
using GMV to tally sales be- tion shouldn’t be taken as an cided to release more details, tech companies are grappling research, known as the Com- disseminate [our process]…so
cause eBay Inc., the San Jose, indication of any violation of said Molly Jackman, Face- with how to ensure the ethical mon Rule that would, among that startups wouldn’t have to
Calif., online marketplace, had federal securities law. book’s public-policy research conduct of research using other things, make it easier reinvent this for themselves.”
U.S. Court Upholds Net-Neutrality Rules MIMS

Mr. Wade says LinkedIn
hasn’t evolved quickly enough
beyond its roots as a recruit-
ing tool and job-search site.
BY JOHN D. MCKINNON planation for its new regula- Continued from page B1 Most of its users aren’t looking
AND BRENT KENDALL tory treatment of broadband able to. Mr. Nadella already for a job, and LinkedIn has so
providers “is watery thin and has mentioned a few of these, far done a poor job of getting
WASHINGTON—A panel of self-contradictory.” including going into a sales them to come back to the site
federal judges upheld the gov- The wireless and cable in- meeting armed with the bios to connect with and expand
ernment’s net-neutrality rules dustries have fought the rules, of participants, and getting a their professional networks.
Tuesday, handing a major vic- arguing they would stifle in- feed of potential experts from That brings us to perhaps
tory to the Obama administra- vestment in telecommunica- LinkedIn whenever Office no- the biggest reason why the
tion in its efforts to step up tions networks and hinder the tices you’re working on a rele- deal may succeed: Mr. Nadella.
oversight of cable and tele- transition to the next genera- vant task. Put bluntly, Microsoft today is
phone companies that provide tion of wireless service, known LinkedIn also could super- a very different company than
ANDREW HARRER/BLOOMBERG NEWS
broadband service. as 5G. They also have worried charge Microsoft’s Customer the one that acquired Nokia,
The divided decision by the the FCC might try to crack Relationship Management Skype or Yammer. Under Mr.
U.S. Court of Appeals for the down on some emerging in- (CRM) software, used to iden- Nadella’s predecessor, Steve
District of Columbia Circuit dustry practices that open-in- tify and track sales leads. Mi- Ballmer, Microsoft sought to
represents a big win for inter- ternet advocates criticize as crosoft is in fourth place in drive users to its platforms,
net companies that favor the methods of skirting the net- market share among the large primarily Windows.
net-neutrality rules. neutrality rules. Those include CRM players, including Sales- As a corollary, that meant
The court’s majority rejected imposing data caps on con- force.com Inc., SAP SE and that acquisitions were quickly
a wide range of telecommuni- sumers but exempting pro- Oracle Corp. integrated with other Micro-
cations-industry challenges to FCC Chairman Tom Wheeler attended a House Judiciary vider-sponsored content. Salesforce is the market soft products and development
the rules, which were put in Committee hearing in Washington, D.C., last year. CTIA, a wireless industry leader, but it holds a minority of new features slowed.
place in 2015. The same appeals group, said in a Tuesday state- of the complex and sometimes Mr. Nadella has shown a
court had twice rejected earlier consumers no longer look to net-neutrality regulations was ment the industry “remains ill-defined market. willingness to meet users
efforts by the Federal Commu- internet-service providers to “a limited one.” The court said committed to preserving an LinkedIn already has its where they are, even if that is
nications Commission to im- provide the online content its job was “to ensure that an open internet and will pursue own CRM-type product, devices running Apple Inc.’s
pose net-neutrality rules on in- they are seeking. agency has acted within the judicial and congressional op- LinkedIn Sales Navigator, but iOS or Alphabet Inc.’s Android
ternet-service providers. “Over the past two decades, limits of Congress’s delegation tions.” more important, it has the mobile operating systems. On
Aimed at ensuring a level this content has transformed of authority.” The FCC’s rules The National Cable & Tele- data and reach that any CRM Monday, Mr. Nadella said
playing field for the internet, nearly every aspect of our fell permissibly within those communications Association company would covet. LinkedIn will be allowed sig-
the rules require internet-ac- lives, from profound actions limits, the court said. said, “We urge bipartisan If CRM is ultimately about nificant autonomy, similar to
cess providers, such as Com- like choosing a leader, building FCC Chairman Tom leaders in Congress to renew managing relationships, what Microsoft’s handling of Mine-
cast Corp. or Verizon Commu- a career and falling in love to Wheeler said the ruling was “a their efforts to craft meaning- better vehicle for that than an craft maker Mojang.
nications Inc., to treat all more quotidian ones like hail- victory for consumers and in- ful legislation that can end on- existing social network with That would mean walking a
content coming across their ing a cab and watching a novators who deserve unfet- going uncertainty, promote its built-in insight about who fine line between autonomy
networks equally, without movie,” the court wrote. “The tered access to the entire web, network investment and pro- is connected to whom? and synergy. The longer the
blocking or slowing competi- same assuredly cannot be and it ensures the internet re- tect consumers.” LinkedIn shares fell by rope that Mr. Nadella gives
tors or speeding up the con- said” for broadband providers’ mains a platform for unparal- Tuesday’s ruling may not be nearly half in a single day in LinkedIn CEO Jeff Weiner, the
tent of those who pay. own add-on applications. leled innovation, free expres- the last legal word on the matter, February when the company less benefit there may be to
Industry appeals to the U.S. The appeals court’s 2-1 rul- sion and economic growth.” but there is no guarantee chal- issued a gloomy sales outlook. Microsoft’s products.
Supreme Court appear likely. ing sided with the FCC in a Judge Stephen Williams, a lengers will succeed in obtaining Michael Wade, professor of in- But don’t bet against him. If
In the core decision, the dense, methodical opinion that Reagan appointee, dissented, further court review of the FCC novation and strategy at Swit- Mr. Nadella can re-energize an
D.C. circuit court ruled the rejected the challengers’ vari- saying a core part of the FCC’s rules. The Supreme Court is zerland-based business school organization as big and legacy-
FCC had sufficient basis to im- ous arguments one by one. approach “fails for want of working with eight justices, who IMD, says the company hasn’t bound as Microsoft, who is to
pose utility-style regulation on The D.C. Circuit majority reasoned decision-making.” sometimes split 4-4 along con- lived up to its potential for a say he can’t do the same for
broadband service, because said its role in reviewing the The judge said the FCC’s ex- servative and liberal lines. while. 13-year-old LinkedIn.
BUSINESS NEWS
MetLife’s Hele Steers Tricky Course U.S.

BY RICHARD TEITELBAUM
Auto
Sellers Say
John Hele didn’t know why
his wife sent him a text mes-
Toyota Is
‘When you’re paying it out of
sage that simply read, “Con-
gratulations.”
It was March 30, and the fi- your own money, you really Top Brand
nance chief of MetLife Inc. BY JOHN D. STOLL
was at a meeting in New York appreciate expenses.’
with other chief financial offi- Owners of American car
cers. dealerships prefer working
Unbeknown to Mr. Hele, a JOHN HELE, the finance chief of insurer MetLife, with Japanese auto makers
U.S. district judge had ruled in speaking of his experience with a now-defunct even after U.S. companies
the big insurer’s favor, over- startup he founded more than a decade ago. spent heavily to make domes-
turning its designation as a tic retail networks more com-
systemically im- petitive, according to a new
CFO portant financial industry survey.
JOURNAL. institution, or Dealers rank Toyota Motor
SIFI. That’s the Corp.’s Lexus and Toyota fran-
label regulators chises as the most valuable
apply to financial giants and say the Japanese company
whose failure they believe and two of its rivals are the
would threaten the economy. most responsive to their
Mr. Hele and his team had needs, according to a report
submitted a 700-page report published on Tuesday by the
to regulators arguing against National Automobile Dealers
the SIFI label, which would Association.
have forced MetLife to keep The trade group, which rep-
more capital on hand and resents and lobbies on behalf
likely submit to stricter fed- of about 16,500 dealers, based
eral oversight. its findings on survey re-
BLOOMBERG NEWS
Now, the 57-year-old Mr. sponses from roughly 9,000

Hele, who was born in a small dealers about their views on
town in Ontario, is helping franchise value, auto maker
guide the largest U.S. insurer policies and the field staff that
by assets as it navigates a car companies employ.
complex restructuring. Its NADA’s report is the latest
goal: to generate more cash, on generating cash makes his performance at MetLife. at Crown Life Canada Ltd., Dutch Ministry of Finance for indication domestic auto mak-
which could be used for acqui- sense, analysts say. It could “He has been a very quick which he joined after gradua- €10 billion in the fall of 2008. ers still have work to do when
sitions or to reward investors. make MetLife’s stock more at- study,” said Eric Berg, an ana- tion. In 1988, he moved to His capital request proved it comes to strengthening rela-
To pursue its new strategy, tractive. lyst at RBC Capital Markets. Merrill Lynch & Co., where he prescient, as the bank needed tionships with their constitu-
MetLife is exiting some busi- Like many of its insurance Former colleagues cite dis- vetted insurance products sold the extra funds during the fi- ents.
nesses and shifting its focus peers, MetLife trades below cipline and a measured dispo- by the firm’s brokers and later nancial crisis. In an influential annual
from many of its traditional book value. Its shares have re- sition as important ingredi- became an investment banker. “When you are a CFO, you study of car companies’ rela-
retail insurance lines, like vari- turned just 0.5% annualized ents in his success. His office Near the height of the tech- are on the front line of all tionships with suppliers pub-
able annuities and universal over the past 10 years versus bookshelf is lined with books nology bubble in 1999, he left these discussions,” said lished last month, Planning
life. Earlier this year, MetLife 5.2% for the S&P 500 index, by management expert Peter Merrill to found a Bermuda Jacques de Vaucleroy, a for- Perspectives Inc. also placed
said it would move to separate according to FactSet. Drucker. Above his desk hangs startup that sought to auto- mer executive board member
off about half of its U.S. retail Mr. Hele and his colleagues a painting of the frigate U.S.S. mate life-insurance underwrit- at ING. “It is like sailing. When
business. still face another go-round Constitution from the War of ing, raising more than $30 you are in a big storm, you
Members of a dealer
Those assets “will be more with the Financial Stability 1812, in which the U.S. failed million. The company folded in just have to keep calm and trade group also give
nimble and more responsive Oversight Council, the regula- in an attempt to conquer his 2003. “When you’re paying it keep going.”
as a separate entity than as a tor that classified MetLife as a native Canada. out of your own money, you Mr. Hele returned to Ber-
Honda and Subaru
part of total MetLife,” Mr. Hele SIFI. The FSOC has said it Even in his youth, Mr. Hele really appreciate expenses,” muda in 2009 as finance chief high marks.
said. would appeal the court ruling stood out. “He scored among said Mr. Hele. for Arch Capital Group Ltd.
The company is also selling in March that reversed its as- the best in the school right off He soon landed at ING Mr. Hele was already well-
its network of 4,000 life insur- sessment. The case could end the bat,” said Bruce White, a Groep NV in Amsterdam as acquainted with many of Japanese auto makers above
ance agents to Massachusetts up before the Supreme Court. high-school math teacher. That chief insurance risk officer, MetLife’s top executives, when domestic counterparts in deal-
Mutual Life Insurance Co. for “We’re encouraged but cau- helped him win a full-tuition and rose to CFO in 2007. a headhunter called him about ing with parts makers, al-
$300 million, shedding the tious,” Mr. Hele said. scholarship to the University Needing €6 billion—or about the CFO job. He joined in 2012. though General Motors Co.
costs associated with running Overall, Mr. Hele, a com- of Waterloo. $6.8 billion at current ex- “These opportunities don’t and Ford Motor Co. have
its own army of salesman. petitive sailor in his spare He excelled in actuarial change rates—to bolster ING’s come by in your life very of- made progress in that area in
The new focus on emphasis time, has won high marks for studies, landing summer work capital, Mr. Hele asked the ten,” he said. recent years.
Ford and GM are reporting
sizable profits in the U.S. amid
SHOP bled in size since the school

opened, and the store offers at
least a dozen sessions a week,
he said.
Under Pressure
Same-store sales for selected grocers
SPROUTS FARMERS
record light-vehicle sales and
low gas prices, which boosts
demand of the light trucks
that deliver a bulk of Detroit’s
Continued from page B1 Village Super Market took a 12% black ink. Many analyst re-
WHOLE FOODS KROGER NATURAL GROCERS MARKET
signed leases for—all of them risk three years ago when it ports, including Bank of Amer-
targeting younger, more price- planned a nearly 80,000- 1Q 2016 ica Corp.’s most recent “Car
conscious shoppers, Mr. Turnas square-foot store in Hanover 8 1Q 2016 4.8% Wars” pipeline report, have
4Q 2015
said. Township, with more amenities 3.7% 1.0% lauded domestic auto makers’
Ace Hardware has set up than a standard ShopRite, Mr. future product plans as well.
4
shops within more than 100 Sumas said. It cost $25 million Another report card will
grocery stores as part of a push to build, at least 50% more than 1Q 2016 come out later in June when
by the Illinois-company into in- any previous grocery stores Vil- –3.0% J.D. Power unveils its annual
0
dependent supermarkets in the lage Super Market has put up, Initial Quality Study. The IQS
past three years. Grocers pay a he said. has long been viewed as a lit-
$5,000 fee and purchase $5,000 The store features an oyster mus test of which auto makers
–4
of inventory to join the hard- bar, a heated open-air dining make the best new vehicles.
ware cooperative. They must space and 90 minutes of free 2014 ’15 ’16 2014 ’15 ’16 2014 ’15 ’16 2014 ’15 ’16 Lexus, Toyota and Honda Mo-
guarantee a certain level of in- child care for shoppers, Mr. Su- Source: Jefferies Group LLC THE WALL STREET JOURNAL. tor Co. once dominated the
ventory at all times. mas said. field, but are now closely ri-
Some concepts have fizzled. The operating profit mar- tive to comparable stores, Mr. the year prior, with sales cise classes are among his most valed by Ford, GM’s Chevrolet
The Fry’s in Phoenix made its gin is on par with other stores Sumas said. growth in the Hanover store loyal, he said, adding that he brand and Lincoln.
debut in 2010 with a carwash in his chain of 29 supermarkets, Village Super Market in April partially offsetting losses from would expand the service to a In addition to representing
but discontinued that after it but the volume of business in reported same-store sales winter weather and competi- new store planned in Old brands, dealers have long
didn’t catch on, a Kroger’s the Hanover store is more growth of 1.7% in the nine tors opening in its market. Bridge, N.J. played the role of being a cus-
spokesman said. The cooking brisk, and its sales growth has months of its fiscal year com- The 150 customers paying “This was a risk well worth tomer for auto makers since
classes, by contrast, have dou- been one of the strongest rela- pared with the same period in $20 a month for unlimited exer- taking,” Mr. Sumas added. revenue is booked on produc-
tion rather than retail sales. If
dealers pull back on orders or
to shareholders yet. trial and toxic waste. NEWCREST MINING mine in April, said it began min- stockpile inventory, car com-
Business People familiar with the mat-
ter said Kuka was indeed sound-
The division specializes in the
recovery of sulfuric acid and
Indonesia Operation ing at Kencana again this past
weekend and expects to in-
panies need to cut production,
boost incentives or dump out-
Watch ing out other potential suitors,
though it was unclear whether a
gases of the refining process,
which are then recycled into
Restarts Gold Mining
Newcrest Mining Ltd. said it
crease production gradually at
the two mines to full capacity
put into rental fleets.
In the NADA survey, Toy-
rival bidder would emerge. clean acid and steam used in a restarted mining at the Kencana over at least two months. ota’s brands were followed by
—Eyk Henning wide range of industrial activi- mine, part of its Gosowong gold The mining firm said it still Honda and Fuji Heavy Indus-
ties, Veolia said. It generated operation in Indonesia, where expects to produce a total of 2.4 tries Ltd.’s Subaru as favorites
VEOLIA about $262 million in revenue in production had been suspended million to 2.6 million troy ounces of auto dealers. Volkswagen
KUKA 2015 and employs 250 people since an unexplained “geotechni- of gold in the year through June AG’s Porsche rounded out the
French Firm to Buy across seven sites in North cal event” in February. across all its operations, al- top five brands—Fiat Chrysler
Investors Criticize Chemours Unit America. A worker was trapped about though output from the Goso- Automobiles NV’s Jeep fran-
Deal With Midea Veolia Environnement SA The deal, which is subject to 300 meters underground for wong site will likely be toward chise—growing rapidly amid a
Investors in German robotics agreed to buy the sulfur-prod- customary closing conditions eight days when Newcrest’s Go- the bottom end of its 195,000- sport-utility boom—and Ford’s
firm Kuka AG are criticizing its ucts assets of U.S. company and regulatory approvals, is ex- sowong operation was damaged to 235,000-ounce estimate. namesake brand were the lone
management for too quickly en- Chemours Co. for $325 million, pected to close in the second by the Feb. 8 incident. —Rhiannon Hoyle domestic nameplates in the
dorsing a $5 billion buyout offer part of the French company’s half of 2016. Newcrest, which restarted top 10.
from China’s Midea Group, while continuing expansion into indus- —Nick Kostov mining at Gosowong’s Toguraci PETRON While NADA said Lexus
German government officials dealers were the most apt to
held out hope that a competing
Company Boosts respond to the survey, dealers
European bid might emerge. Net-Profit Forecast selling Mercedes-Benz, Hyun-
Midea, an appliance maker, Petron Corp., the largest oil dai Motor Co. cars, Porsche
last month offered to purchase company in the Philippines, has models and Fords also had
the high-technology company, raised its 2016 net-profit fore- strong participation rates.
marking one of the highest-pro- cast because of an increase in The results come several
file bids by a Chinese company global oil prices. years after GM and Chrysler
for a European target in a year In February, Petron President spent billions of dollars to
of frenzied deal making. Sensi- Ramon Ang projected a net knock out thousands of deal-
tivity around the deal has been profit of 18 billion pesos ($390.2 ers from their U.S. dealer net-
high because Kuka supplies top million), adding that earnings works during government-run
German industrial firms and would increase if oil prices con- reorganizations during the
even U.S. defense contractors. tinued to rise. 2008-2009 financial crisis.
Some Kuka investors would At the time, oil prices were While having more dealers
like to see a competition for the moving toward the $30-a-barrel than competitors helps a car
company, and have criticized level. In 2015, the company re- maker reach buyers in more
Chief Executive Till Reuter for ported a net profit of 6.3 billion places, it dents throughput
not publicly urging bids to rival pesos. and can jeopardize the profit-
Midea. On Tuesday, Mr. Ang said ability of individual stores.
NIGEL TREBLIN/REUTERS
Kuka’s management isn’t prospects had improved because Lexus dealers, for instance,
obliged to actively solicit poten- crude oil was trading closer to sold about 1,472 vehicles per
tial rival bidders under German the $50-a-barrel mark. “If this dealer in 2015, compared with
law, according to Zacharias Sau- trend [of a higher oil price] con- 644 at Honda’s Acura stores,
tner, a professor at the Frankfurt tinues, we’ll likely hit 22 billion 1,033 at Daimler AG’s Mer-
School of Finance. Kuka hasn’t pesos,” Mr. Ang said. cedes-Benz stores and 204 at
officially recommended the offer A Kuka robot pours beer. Some Kuka investors think a deal for Midea was endorsed too quickly. —Cris Larano GM’s Cadillac stores.
MANAGEMENT
WORKAROUNDS
CEO
Scant Progress Continued from page B1
Getting Women on put work ahead of back-to-
(CLOCKWISE FROM LEFT) RYON:LOCKHART PHOTOGRAPHY; THE BELL FAMILY; RACHEL GLINCHER
school nights and sports games
Corporate Boards as he advanced at the profes-
The number of women on cor- sional-services firm. “When
porate boards is barely budging. you’re younger, you have this
Women hold less than one- sense of your own immortality
fifth of board seats at S&P 500 and you’ll always be able to
companies, according to Catalyst, catch up,” the 55-year-old said.
a research group that tracks ex- The father of three said he
ecutive women. Catalyst’s annual did a better job being present
board census found that 19.9% for the youngest of his three
of board seats were held by daughters, who is now in col-
women last year, compared with lege, leaving work in the after-
19.2% the year prior. noon to watch her soccer
Progress toward boardroom games.
parity is “painstakingly slow,” Mr. Glaser logged back onto
said Trina Gordon, chief execu- email after games to catch up
tive of executive search firm on work. During family time,
Boyden World Corp. however, he was often glued to
The pace doesn’t appear to his phone even when there
be picking up much. Slightly weren’t important emails wait-
more than a quarter of open di- ing.
rector positions last year went “I would prioritize [emails]
to women, with the remaining as if they were urgent just be-
73.1% going to men. cause there was five minutes of
Some companies have in- downtime in my living room,” Interviews with 25 chief executives, including clockwise from
creased female representation on he said, adding that he realized above Eric Poirier of Addepar, Aaron Bell of AdRoll and Andrew
their boards. Microsoft Corp. many emails could wait. He Glincher of Nixon Peabody, reveal lessons learned by bosses who
added Sandra Peterson, group now might glance at his inbox climbed the corporate ladder and still found time for their family.
world-wide chairman at Johnson in such situations but tries not
& Johnson, to its board in De- to open emails unless they’re pany can view. Former J.C. percentage of your time,” said assumption is “complete and his secretary, that tallies points
cember, and Twitter Inc. last pressing. Penney Co. chief Ron John- 75-year-old Delos “Toby” Cos- full immersion in work.” based on how much time he
month announced that BET Net- Other executives say they son, currently CEO of e-com- grove. He leads the Ohio-based That is starting to change. spends with family. Arriving
works CEO Debra Lee was joining learned the hard way. Going merce startup Enjoy, doesn’t Cleveland Clinic and meets up Executives know that they home by 6:15 p.m. earns a
its board. But other firms remain through a divorce helped schedule internal meetings be- with his wife, who spends her must tout flexible work policies point, for example, while get-
resistant. Shareholders of Res- Choice Hotels International fore 9 a.m. and after 4 p.m., workweeks in San Diego at a and preach balance to attract ting home by 5 p.m. earns two.
taurant Brands International Inc., Inc. CEO Steve Joyce, 56, real- which has allowed the 57-year- health-care startup, on week- young hires. Many 20- and 30- Aaron Bell, the 38-year-old
which owns Burger King and Tim ize that he needed to better in- old to coach his children’s ends. something fathers are intent on CEO of tech company AdRoll
Hortons, recently voted down an corporate his family with his sports teams. “You make your choices. You being more involved in their Inc., moved closer to the office
investor proposal meant to boost work and travel schedule. He Earlier in his career, Kayak can never look back,” Dr. Cos- children’ lives than their fa- to spend more time with his
diversity on its all-male board. now takes his girlfriend and Software Corp. CEO Steve Haf- grove said. thers were. children. He sometimes wished
“RBI values its diverse and children along on work trips ner, 47, used to work 80-hour Reggie Aggarwal, 46, is a fa- As younger leaders take on that his turn as CEO had come
dynamic workforce and pro- and carves out time for himself weeks. A father of four, he now ther of three and the CEO of CEO jobs, some are doing before having children, the bet-
motes a culture of equality and too—whether it is a daytime works about 65 hours weekly, Cvent Inc., a Tysons Corner, things differently. Facebook ter to work 20-hour days at the
inclusion,” the company said in a workout or a museum visit with a flexible schedule. Va., event-management soft- chief Mark Zuckerberg, 32, office without guilt.
statement, adding that the while traveling for business. “Work-life balance is work- ware company. He tries to ab- took a two-month-long pater- “It’s really difficult having
board believes its practices “sup- “It is critical for the CEO to ing as little as you can to get stain from work one day a nity leave, for example. Still, two things in your life that are
port board diversity.” set the tone,” he said. “If he the important stuff done and week. another young CEO and co- such high priority,” he said.
—Rachel Feintzeig doesn’t, there’s a secret kind of then taking all the other time “My work-life balance isn’t founder, Lyft Inc.’s Logan “You always feel like you’re
code, ‘if you take vacation, and putting it against your great. My wife understands Green, also 32, said running a sub-optimizing for both.”
you’re not as serious an execu- family or your interests,” he that.” startup means missing most
Jack Welch Tees tive.’ ” said. Male executives traditionally bedtimes for his one-year-old ONLINE TODAY
At wealth-management soft- High-ranking, highly paid haven’t been expected to feel twins.
Off on Behavior ware company Addepar Inc., jobs come with high demands, conflicted about missing family VMware Inc. chief Pat Gel- See how 25 male
Displayed on Links
An occasional look at execu-
CEO Eric Poirier, 34, makes
sure to mark time dedicated to
his baby daughter on a calen-
though.
“You don’t get to be a CEO—
certainly not a successful
time, said Stew Friedman, a
management professor at the
University of Pennsylvania’s
singer said he has built “trip
wires” into his life to ensure he
is not overworking. He de-
WSJ
.COM
CEOs juggle work
and family at
WSJ.com/
tives’ first—and sometimes— dar that everyone in the com- CEO—unless you’re giving a big Wharton School. Instead, the signed a chart, maintained by Management
worst jobs, featuring Jack
Welch, former CEO of General
Electric Co.
My first job was as a caddie
How One CEO Finds Time for Fitness, Fun and Family
at the Kernwood Country Club A day in the life of Kayak Software’s Steve Hafner
in Salem, Mass. I caddied there
for about 10 summers begin-
ning when I was 8 years old.
Caddying was the best
learning experience I ever had.
It was as a caddie that I wit-
nessed virtually every aspect
of human behavior.
I was disgusted by instances
of cheating and poor sports-
manship.
I learned to appreciate cli-
ents who were generous of
spirit—and generous with tips.
That made a lasting impres-
sion on me, and I’ve tried over
my lifetime to be generous to
those with less than me.
One day around my senior
JESSE NEIDER FOR THE WALL STREET JOURNAL (4)
year in high school, I was as-

signed to caddie for a notori-
ously difficult club member.
On the sixth hole, he hit the
ball into a water feature. He
told me to go get it. I’m not
quite sure what got into me,
but I responded by tossing his
clubs into the water and tell-
ing him to go get those. Then I
ran home. The caddie master
later came to my house to
speak with my parents. I was
fired, of course—the end of my
caddying career. Work-life balance is working as little as you can to get the important stuff done and then taking the remaining time and putting it toward family or other interests, says
—as told to Lindsay Gellman Steve Hafner, the 47-year-old chief executive of Kayak Software. Mr. Hafner, above, carves out time for exercise, for work, an employee lunch and for his four children.
5
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TUESDAY’S MARKETS B9 | MARKETS DIGEST B10 | HEARD ON THE STREET B12 | FINANCE WATCH B12
Deutsche Bank’s Asia Hong Kong Developers

CEO Is Latest to Depart Embrace Art and Design
BANKING | B11 THE PROPERTY REPORT | B8
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, June 15, 2016 | B7
As of 4 p.m. ET EUR/GBP 0.7932 À 0.24% YEN/DLR ¥106.05 g 0.19% GOLD 1285.60 À 0.09% OIL 48.49 g 0.80% 3-MONTH LIBOR 0.65480% 10-YR TREAS À 2/32 yield 1.611%
SEC Staff Backs Speed-Bump Exchange

Commissioners to the first platform that slows IEX’s campaign to move “immediately accessible.” Crit-
down trading, countering the from a private trading venue ics, including Citadel LLC, the
vote on whether to let decadelong trend toward ever- to a full-fledged exchange has hedge-fund manager and elec-
IEX launch a platform greater speed. divided Wall Street, with rival tronic market maker, say IEX’s
The SEC’s three sitting markets and some high-fre- delay will lead to stale quotes
that slows trading commissioners aren’t required quency trading firms opposing and make it hard for brokers
to support the staff’s views. its bid to apply a speed bump to know they are getting the
BY DAVE MICHAELS But the full commission rarely to orders. IEX says the innova- best price for clients.
rejects a formal staff recom- tion will protect investment The staff’s recommendation
WASHINGTON—The Secu- mendation. Two yes votes are firms such as mutual funds follows a warning in May by
rities and Exchange Commis- needed for approval. from what IEX calls abusive Nasdaq Inc. that the agency
sion’s staff has recommended If the SEC’s commissioners high-frequency-trading strate- could be sued if it approves
that the agency approve IEX give the green light to IEX, gies. IEX’s crusade was popu- IEX’s speed-bump design. Nas-
Group Inc.’s controversial bid which stands for Investors’ Ex- larized in the 2014 Michael daq’s lawyers wrote that the
to launch a new stock exchange, it would be the first Lewis book “Flash Boys,” speed bump would violate
change, according to people major new stock exchange in which chronicled the race rules that require orders be
MIKE SEGAR/REUTERS
familiar with the matter, sig- the U.S. since the SEC ap- among American exchanges available immediately to trad-
naling likely approval when proved several venues in 2010 toward ever-faster trading. ers. Granting IEX an exemp-
the agency’s commissioners that are now owned by Bats The fight before the SEC tion from that regulation
vote on the order Friday. Global Markets Inc. has turned on technical ques- would require a separate rule-
That would end months of An SEC spokeswoman de- tions, such as whether a speed making process, which the
debate and lobbying over the clined to comment, as did an bump would violate regula- SEC hasn’t undertaken, the IEX, headed by CEO Brad Katsuyama, aims to launch an exchange
startup’s proposal to create IEX spokesman. tions that say orders must be Please see FLASH page B9 it says would protect investors from high-speed-trading abuses.
U.S. Regulators
Scrutinize PwC’s
Ties to Clients
PricewaterhouseCoopers ally, according to data from
LLP is in talks with regulators consulting firm Barrington
to resolve a dispute about Partners.
whether the accounting giant In an extreme situation, the
is too close to some of its mu- funds say in the filings, they
tual-fund clients, highlighting could be blocked from issuing
an issue that could up- new shares to investors for as
end some relationships be- long as it takes them to get re-
tween auditors and money audited, because mutual funds

managers. can’t issue new shares without
audited financial statements.
By Michael Rapoport, The matter “has certainly
Sarah Krouse created some scrambling at
and Dave Michaels fund firms trying to figure out
what to do,” said Douglas Dick,
The disagreement with the a partner at law firm Dechert
Securities and Exchange Com- LLP who advises asset-man-
mission’s staff centers on a agement companies
SEC requirement known as the Some of PwC’s competitors
Loan Rule, according to federal might run afoul of the SEC’s
filings from fund companies rule, too. Deloitte & Touche
including BlackRock Inc., LLP has told its client Waddell
Allie Caran, of coffee roaster Toby’s Estate in Brooklyn, which uses fresh beans, says she can taste the difference versus old beans. Goldman Sachs Asset Man- & Reed Financial Inc.’s Ivy
agement and Delaware In- Funds that a lender to Del-
That Coffee Could Be Nine Years Old

vestments. Auditors, accord- oitte owns at least 10% of at
ing to the rule, can’t serve least one Ivy fund, according
clients that are at least 10% to an Ivy filing last week. The
owned by a bank or any other filing doesn’t mention any dis-
BY JULIE WERNAU ter varieties have come down Cordero, senior adviser on schools and vending machines. large firm that lends the audi- pute with the SEC, and Del-
enough to tempt buyers who global strategy for the Colom- Many are expected to combine tors money. oitte told Ivy that its lender’s
Before you take that next would usually be in the market bian Coffee Federation, an in- the older beans with newer PwC has told dozens of stake doesn’t impair Deloitte’s
sip of coffee, consider this: for lesser grades. dustry group. ones or roast them longer to funds it hasn’t violated the re- judgment.
Some of the beans in your cup Coffee that sits for 121 days According to exchange data, mask the taste. quirement, but it is unclear The SEC, PwC, Deloitte and
of joe might have been picked after being certified by the at the end of May, 18% of ex- “You’re not going to see whether the SEC’s staff will the fund companies all de-
during the Bush administra- ICE Futures U.S. exchange in change-certified beans were this in your Starbucks,” said decide that it has, according to clined to comment.
tion. New York loses half a cent a more than three years old, Jorge Cuevas, chief coffee offi- the filings. The SEC showed concern
Arabica coffee that had pound in value. The value of compared with 11% in May cer at coffee importer Sustain- Some mutual funds say they about auditor independence at
been stored away as markets three-year-old coffee gets cut 2013. Several coffee roasters able Harvest, based in Port- could be forced to find new au- mutual funds last year, when
cratered in 2013 is now pour- by 35 cents a pound. Nine- said they wouldn’t purchase land, Ore. “It’s mostly going to ditors if the SEC decides PwC Deloitte paid more than $1.1
ing out of warehouses, flood- year-old coffee is discounted beans that were more than a be in generic brands that you has violated the rule and thus million to settle SEC allega-
ing the market with beans as by $1.55 a pound, which would year old because they lose might get at an institutional hasn’t maintained the re- tions that it didn’t abide by its
old as nine years. make it essentially free, as ar- their flavor. level.” quired “independent” arm’s- own policies when its consult-
Those beans, which are abica coffee prices for July de- Coffee buyers said the old- As arabica coffee’s value length relationship with its ing unit had a business rela-
considered higher quality than livery on Tuesday closed at est arabica beans are headed deteriorates in storage, it be- clients. tionship with a trustee of
the more bitter robusta type $1.35 a pound. to bulk and instant-coffee comes more attractive to cer- That could put in play some three funds that Deloitte au-
typically found in instant cof- “There are some very old roasters, and ultimately to the tain commercial buyers that of the $300 million-plus that dited. Deloitte didn’t admit or
fee, are coming out now be- coffees that have been sitting companies that supply largely typically favor the lower-qual- U.S. mutual funds, exchange- deny any wrongdoing in agree-
cause they get cheaper the around for years that are go- institutional coffees that can ity and cheaper robusta bean, traded funds and closed-end ing to that settlement.
longer they sit. Prices for bet- ing out the door,” said Edgar be found at some hotels, Please see COFFEE page B11 funds spend on audits annu- Please see AUDIT page B12
U.K. Vote: From Denial to Fear Balance Seen for Oil Market
There’s a familiar pattern exit from the EU—“Brexit”— Italy, Spain and Portugal BY SUMMER SAID
for how markets treat tight should remember what this over Germany—a standard
political events. First, inves- means: They are so worried measure of how risky they Increasing Asian demand
tors ignore them. Then, a that they are prepared to are seen to be—are at the and world-wide disruptions to
few months ahead, some pay the German government highest since the global sell- oil production could eat away
start to hedge against a bad to take their money for a de- off in February. today’s glut of petroleum by
outcome. cade. Investors have even lost the end of 2016, the Interna-
About two Money flooded into other some of their faith in Ire- tional Energy Agency said.
weeks be- havens, too. The Swiss franc land, the poster child for eu- In a monthly report issued
ESSAM AL-SUDANI/REUTERS
forehand, had its best day against the rozone policy success, with Tuesday, the IEA said produc-
panic sets euro since March last year, its spreads over Germany tion outages world-wide cut
in. With according to Thomson Reu- now at the highest since last supply by nearly 800,000 bar-
Britain’s ref- ters Datastream, and hit its summer. rels a day in May, the first sig-
STREETWISE erendum on highest level for the year, Eurozone banks, mean- nificant drop since early 2013.
JAMES whether to while gold in euro terms ap- while, have fallen 10% in the But the IEA warned that the
MACKINTOSH leave the proached its high hit during past three days. surplus could reappear in the
European the global worries in March. These are very short-term second half of next year. Oil output fell by nearly 800,000 barrels a day in May.
Union now At the same time, the moves, but they show some In the first quarter of 2016,
less than a fortnight away, euro sold off against the dol- of the problems investors global oil demand was 1.6 mil- “Less oil has been stockpiled other member states of the
anxiety has finally turned to lar, dropping 0.7% to $1.12. have in working out what lion barrels a day, the IEA said, than we originally expected,” Organization of the Petro-
fear among investors. Worries about the pound— will happen. It has become raising an earlier estimate. It the report said, lowering the leum Exporting Countries.
In the eurozone, Tuesday which fell 1% against the dol- expensive to protect against boosted its demand forecast estimate of global oversupply The agency said it expects
will go down in market his- lar—have morphed into wor- falls in the pound using op- for the rest of the year to 1.3 in the first half of 2016 from global demand to grow next
tory as the day the region’s ries about the euro. tions markets, so many are million barrels daily from 1.2 1.5 million barrels a day to year by 1.3 million barrels a
benchmark bond turned neg- We know what euro wor- looking to bet on the knock- million in its May forecast. around 800,000. That is due in day to 97.4 million barrels a
ative: The 10-year German ries mean: Sell the euro- on effects of a British exit. It also changed its outlook part to production outages in day. But it said recoveries to
bund closed at minus 0.008% zone’s weakest countries and One of the most obvious is on the global oversupply that Nigeria, where attackers have production in Canada, Nigeria
in a flight to safety. Inves- its banks. Sure enough, the that cracks widen elsewhere has driven oil prices down blown up oil installations, off- or Libya could further drive up
tors worrying about a British spreads of 10-year yields of Please see STREET page B12 more than 50% since 2014. setting supply increases in supply, sending prices down.
THE PROPERTY REPORT

Hong Kong Builders Turn to Art, Design
Architects in the city say developers used to ask them to maximize floor area, but now request more flair, ‘ because they have to get creative’
BY ANJIE ZHENG Mr. Cheng.
It is marketed under the “Ar-
HONG KONG—Hong Kong tisanal Movement,” which, ac-
real-estate developers are turn- cording to Mr. Cheng, cele-
ing to art and design to differ- brates craftsmanship and
entiate themselves in a crowded nature. The complex includes
market. stones flown in from Japan, a
Among high-rise offices and traditional Japanese bathhouse,
luxury-goods retailers, the city’s teahouse, a meditation corner
first commercial building dedi- and a Zen garden.
cated to exhibiting art is being “Instead of just hiring a big
built in its Central business dis- designer or a big architect, we
trict. A few miles away, a new treat every object, and the en-
luxury residential complex has tire space like an exhibition, a
been meticulously curated by a museum that we curate,” Mr.
billionaire property tycoon. Cheng said.
Architects in the city say The turn to art in real estate
that developers used to ask is in part market-driven. Aware-
them to maximize floor area, ness of and exposure to art has
but now request more flair in flourished since Art Basel, one
design and furnishings. of the world’s largest art fairs,
“Developers are trying some- picked Hong Kong as its Asian
thing special because they have base in 2013, bringing in droves
to get creative in order to at- of well-heeled collectors and
tract new customers,” said An- fans to the city every year.
gel Law, head of residential in- Underscoring the integration
vestment at DTZ Cushman & of art in real estate is the suc-
KIN CHEUNG/ASSOCIATED PRESS

Wakefield in Hong Kong. This cess of Swire Properties’ Opus,
includes using new color Mr. Gehry’s first foray into Asia.
schemes, layouts and furnish- The 12-story apartment
ings that are “different from the tower has 270-degree views of
square boxes that used to sell,” Victoria Harbour from on top of
she said. the exclusive Victoria Peak and
The trend, which began with is considered by many to be a
Opus Hong Kong, an apartment work of art in itself, analysts
building designed by Frank The luxury residential building Opus Hong Kong, designed by Frank Gehry, reversed decades of cookie-cutter construction. said. All 12 homes in the build-
Gehry that featured twisting ing were sold, with the most ex-
sides and curved facades com- to UBS, which ranks Hong Kong the Central business district. any buildings purpose-built for rants. pensive going for $65.6 million,
pleted in 2012, reverses decades property second in the world Rents on grade-A offices in the art. We felt there was a need to Adrian Cheng, executive di- or $12,355 a square foot.
of cookie-cutter construction after London for being at risk of district rose 11% in the first address this,” said Kristine Li, rector of New World Develop- It remains to be seen
based more on utility than art- being a bubble. A broad slow- quarter from a year earlier, ac- assistant general manager of ment Co. and founder of K11 whether promoting art and de-
istry. down in overall home sales cording to property consultancy portfolio leasing at Henderson. Art Foundation, already en- sign will be a long-term, indus-
Tightly packed Hong Kong since late last year has left the Knight Frank. Office vacancy in The developer saw an “opportu- joyed success mixing art and re- trywide movement but, in the
consistently ranks among the commercial and luxury real-es- the first quarter was as low as nity to offer something unique,” tail in his K11 art malls in Hong short term, more developers
world’s most expensive cities in tate markets largely unscathed, 2.2%, according to real-estate she said. Kong and Shanghai when he are embracing the idea.
which to live and work. In 2016, because demand outpaces sup- firm Savills. The 24-story building, set to ventured into curating his first “It is perhaps a sign that the
for the sixth year in a row, re- ply in both segments, according Yet local architect William open in 2017, will feature high residential complex, Pavilia Hill, market is increasingly both
search firm Demographia to analysts. Lim proposed to build an art ceilings, an external gondola a few miles from the business more competitive and more dis-
ranked Hong Kong the least af- A commercial skyscraper building rather than another of- and facades that can open up to district. criminating,” Peter Cookson
fordable city for housing in the would have been a natural fice building that, he said, move works of art onto each That apartment complex Smith, president of the Hong
world. choice for developer Hender- would add little value to the floor. Called HQueen’s, it mainly near busy Causeway Bay dis- Kong Institute of Urban Design,
Property prices have nearly son Land Development Co. for district. will house art galleries, along trict is filled with sculptures said of the recent use of art in
doubled since 2003, according its plot of land in the middle of “We recognized there aren’t with some shops and restau- and paintings handpicked by real estate.
Vornado Looks Toward

A Final Cut: Washington
BY ELIOT BROWN ularly in real estate, is that if in- a nagging problem: The stock
vestors want to be diversified in price is still lagging.
For six years, real-estate gi- many sectors, they can do it Vornado is trading at a large
ant Vornado Realty Trust has themselves by buying separate discount to the estimated un-
been lopping off chunks of its stocks. derlying value of its properties.
empire in a bid to slim down Much as GE has dropped its Its performance has trailed
from a sprawling property con- finance and appliance arms, competitors—a fact that helped
glomerate to one more svelte Vornado has been trimming spur Mr. Roth to embark on the
and focused. ever since 2012, when Mr. Roth simplification in the first place.
Now it appears to be nearing grew tired of a lagging stock Back when the simplification
CAROL M. HIGHSMITH/GETTY IMAGES
a final excision: Washington, price. was announced, Vornado’s stock

D.C. Vornado Chairman and A brash and razor-sharp ex- traded at a level equal to the es-
Chief Executive Steven Roth in ecutive raised in the Bronx, Mr. timated value of its properties,
recent months has mentioned Roth built Vornado up from a according to real-estate tracker
with increasing frequency the set of New Jersey strip malls Green Street Advisors. At the
possibility that the company into one of Manhattan’s largest time, Boston Properties Inc.—
will spin its chunk of Washing- landlords with top-quality tow- one of Vornado’s main competi-
ton-area offices and apart- ers like Bloomberg LP’s head- tors—traded at a 7% premium,
ments—estimated by analysts quarters. while the office sector overall
to be worth about $6 billion— But investors had grown traded at a 1% discount. Vornado is trying to turn a set of buildings in Washington suburb Crystal City, Va., into a tech hub.
into its own company, separate weary of the company’s lack of By June 1 of this year, Vor-
from Vornado. focus, including the landlord’s nado traded at a 13% discount a decade now, vacillating be- plied. erating income in the Washing-
“We think each company, if ill-fated 2010 bet on J.C. Penney compared with an average 8% tween revamping it as a hotel Derek van Dijkum, an analyst ton division is down 20% since
separated, would thrive and Co., in which Vornado lost an for both the sector and for Bos- and demolishing it to make way at Credit Suisse Group AG, said 2011, falling to $323 million in
would do better than if com- estimated $250 million. ton Properties. Mr. Roth has for an office tower. that while he is bullish on the 2015. The company is surren-
bined,” Mr. Roth said at an in- Since the simplification drive made no secret of his distaste And Mr. Roth, 74 years old, company and it is underappre- dering a set of office buildings
dustry conference last week, was announced, Vornado has for this discount. has been slow to identify a suc- ciated, decisions there take a known as Skyline to creditors,
cautioning that no decision has sold more than $4.7 billion of “I hate our stock price. I hate cessor for when he retires, mak- long time to be made. as it has been unable to replace
been made. “It’s sort of decon- property and other businesses, it,” he told analysts on a May ing investors nervous about the “I liken it to a battleship or a federal tenant that left.
glomerating—if that is a word.” and in 2015 it split off its strip- 2015 conference call. “I take it direction of the company. aircraft carrier,” he said. “Spin- At the same time, it is trying
That word, deconglomera- mall business into a $3.7 billion personally.” At a March conference, he ning off a company is a very, to make a set of buildings in
tion, has been increasingly em- retail company, Urban Edge Analysts say the reasons are batted aside a question on the very difficult thing to do." Washington suburb Crystal City,
ployed in the lexicon of corpo- Properties. Today, Vornado’s numerous. Mr. Roth, while re- topic: “When we have some- Mr. Roth declined through a Va., which was also hit hard
rate America in recent years as portfolio is estimated to be spected in the industry for his thing to say, to you and to the spokesman to comment. when federal agencies left, into
investors in sprawling compa- worth more than $30 billion. intellect, is renowned for being market, we’ll say it.” His ques- Washington has been a con- a technology hub. But the prog-
nies from General Electric Co. The culling has left Vornado slow to make big decisions. For tioner, Citigroup analyst Mi- cern for Vornado for years, as ress has been slow, in part be-
to Viacom Inc. have successfully focused on New York and Wash- instance, he has wavered on chael Bilerman, pressed him: the region and Vornado’s prop- cause growth in Washington
pushed for more specialization. ington, D.C., office and high-end what to do with the giant Hotel “We’re between friends.” erties have been hit hard by has been elusive amid federal
The overarching theory, partic- retail space. But there has been Pennsylvania in Manhattan for “Not really,” Mr. Roth re- federal spending cutbacks. Op- austerity measures.
Industrial REITs Receive a Lift as Online Retail Thrives

BY PETER GRANT 2015, tenants in the top 47 every dollar of online sales other parts of the retail world. has an impact on inventory.” suffered a severe space glut in
markets occupied 101.7 million needs three times more distri- Major retail companies such E-retailers also require the aftermath of the 2008
Investors in recent years more square feet than they did bution-and-warehouse space as Macy’s Inc. and Sears more inventory space because crash.
have been ho-hum about on- at the beginning of the year, than one dollar of bricks-and- Holding Corp. are getting moving their goods tends to But so far in this cycle,
line shopping’s potential as a according to data firm Reis mortar sales. hammered as consumers in- be less efficient than moving many industrial REITs have re-
growth engine for companies Inc. That is up from 93 million “Even if retail sales in the creasingly shop online. inventory for stores. “If you strained their urge to develop
that own warehouses and dis- in 2014. economy stay constant, just a Last year, 7% of U.S. retail look at major retailers like a lot more new space. For ex-
tribution centers. This year’s exuberance shift from stores to e-com- sales were online, compared Wal-Mart, warehouses are set ample, Duke has preleased
Now Wall Street is giving partly reflects the strong first- merce is going to grow indus- with 3.9% in 2009, according up to send truckloads of goods 79% of the $650 million worth
that a rethink. quarter earnings posted by in- to a Green Street Advisors to individual stores,” said of new space it is developing.
Shares of real-estate invest- dustrial REITs such as Prolo- analysis of U.S. Census Bureau James Connor, chief executive In 2008, only 15% of Duke’s
ment trusts that own indus- gis Inc. and Duke Realty Corp.
Investors realize data. of Duke Realty. Online distri- space under development was
trial space have soared 17.3% But the rally also is a sign that that e-retail will Meanwhile, an April report bution centers “are set up ex- preleased, Mr. Connor said.
this year, compared with 6% investors are recognizing that on the industrial sector by actly the opposite,” he said. “We haven’t all gotten to-
for all equity REITs and 1.7% online retail is going to have a
have a deeper effect Green Street Advisors pointed “Everything goes out in one- gether and shot ourselves in
for the S&P 500, according to deeper and longer lasting im- than once thought. out that U.S. inventory levels sies and twosies.” the foot by overbuilding the
Green Street Advisors. pact on demand for industrial have been rising faster than As online retail has grown, market,” he said.
In 2015 and 2014, by com- space than previously ex- sales since 2011. few expected industrial REITs Mr. Frankel points out that
parison, industrial REITs un- pected. trial demand,” said Hamid Analyst Eric Frankel said to be hurt. But it hasn’t been demand for industrial space
derperformed the real-estate One big reason: Processing Moghadam, chief executive of that is partly because e-retail- clear how much they would may decelerate as internet dis-
market by 0.6% and 9.1%, re- goods for online distribution Prologis, which controls 667 ers have needed to keep more benefit. tribution becomes more effi-
spectively, Green Street Advi- is proving to be more compli- million square feet of indus- inventory on hand as they Many believed retailers cient. He notes that a huge on-
sors says. cated and requires more space trial space world-wide. promised customers shorter would be able to store both line retailer like Amazon.com
Analysts believe that inter- than processing goods for The growing appeal of in- delivery times. online and bricks-and-mortar could “curb overall demand”
net retail accounts for much of bricks-and-mortar stores. Pro- dustrial REITs contrasts “People are saying ‘I want inventory in existing distribu- by greatly increasing its offer-
the increase in demand for in- logis, the country’s largest in- sharply with the pain that on- my shipment in one or two tion facilities. ing of its logistics services to
dustrial space. At the end of dustrial REIT, estimates that line shopping is inflicting on days,’” Mr. Frankel said. “That Also, the industrial sector smaller retailers.
MONEY & INVESTING
U.S. Financials Financier Pushes for ‘Leave’ Vote

Hit by Bond Yields BY SIMON CLARK
The U.K. finance industry

would be better off outside of
BY SAUMYA VAISHAMPAYAN Synchrony Financial, the European Union, whose
AND RIVA GOLD which issues credit cards, on rules have restrained its
Tuesday increased its forecast growth, a British financier and
Falling bond yields dragged for losses over the next 12 backer of the ruling Conser-
financial shares lower Tues- months and said it was build- vative Party said Tuesday.
day, giving U.S. stocks their ing up reserves for future “The EU is imposing legisla-
fourth consecutive session of losses. Shares fell 13% by late tion onto the U.K. to make it
losses. afternoon. less competitive in financial
Recent declines have Still, losses in U.S. stocks services,” said Edmund Truell,
dragged the S&P 500 back have paled in comparison with who made his fortune as a pri-
from near-record levels as in- declines in Europe, which vate-equity investor.
vestors con- would be hit more by the U.K. Mr. Truell said he will vote
TUESDAY’S sider coming vote, analysts said. to leave the EU on June 23
MARKETS central-bank “If there’s one place in the and that he will refrain from
decisions, the world where we could put further contributing to the
THE WALL STREET JOURNAL

state of the money in, it would be large- Conservatives as long as
global economy and next cap U.S. stocks,” said Sean Prime Minister David Cameron
week’s U.K. vote on European Lynch, co-head of global eq- remains leader. He has given
Union membership. The S&P uity strategy for the Wells about £400,000 ($568,000) to
500 posted its largest three- Fargo Investment Institute. He the Conservatives.
day decline since February in said that Tuesday’s retail-sales Mr. Truell said he would re-
the period ended Monday. data suggested the U.S. econ- sume giving if one of the poli-
Meanwhile, investors have omy could pick up in the sec- ticians campaigning to leave Edmund Truell says banks are promoting their own interest by backing U.K. membership in the EU.
rushed to buy government ond quarter, which would bode the EU, such as former London
bonds perceived as safe, push- well for a recovery in corpo- mayor Boris Johnson, Michael the EU, with international speech in the U.K. that the erecting enormous barriers to
ing those yields lower and, in rate profits and stocks. Gove or Iain Duncan Smith, banks setting up to sell prod- Wall Street bank could cut entry, vast compliance depart-
some cases, into negative ter- The Stoxx Europe 600 becomes leader. ucts and services across 28 jobs in the country and shift ments,” Mr. Truell said.
ritory. weakened 1.9% Tuesday, ex- “I think they have done a nations without having to get positions to elsewhere in Eu- Mr. Cameron announced the
“People got a lot more ner- tending its declines to 7.4% sterling job,” said Mr. Truell, regulatory approval in each in- rope in the event of a vote to referendum in February after
vous very quickly,” said Steve over a five-session losing 53 years old, referring to dividual country. About half of leave. he secured a deal with other
Sosnick, an options trader at streak. those who are advocating an the U.K.’s £6.9 trillion in bank- Banks are promoting their EU leaders on Britain’s de-
Timber Hill, the market-mak- Polls of potential voters exit from the union. “I think ing assets are held by non- own, rather than the national, mands for a changed relation-
ing division of Interactive Bro- have continued to narrow they have done a brave job.” British institutions, according interests by backing the cam- ship. Concessions secured by
kers. “The ‘Brexit’ talk is not around the U.K.’s June 23 ref- Mr. Truell was speaking from to Fitch Ratings. London’s role paign to remain, said Mr. the U.K. included safeguards
new, but it seems like…the U.S. erendum, triggering concerns his City of London office, dec- at the center of this financial Truell, a former chairman of for EU countries like the U.K.
equity market finally decided about the future of the Euro- orated with antique furniture market could be in jeopardy if the British Private Equity and that aren’t part of the euro-
to pay attention to it.” pean economy and the health and paintings of Victorian Britons vote to leave the EU. Venture Capital Association. zone, strengthening national
The Dow Jones Industrial of its financial markets. British cavalrymen. J.P. Morgan Chase & Co. “They’ve spent hundreds of parliaments and curbs on ac-
Average lost 57.66 points, or The 10-year German gov- London has established it- Chief Executive James Dimon millions if not billions comply- cess to benefits for other EU
0.3%, to 17674.82. The S&P ernment bond yield fell below self as the financial center of warned earlier this month in a ing with European directives, migrants.
500 fell 0.2%, and the Nasdaq zero for the first time Tues-
Composite slipped 0.1%. day, closing at -0.008%. The
Financial stocks led the S&P
500 lower, with the group fall-
ing 2% by late afternoon. The
financial sector has dropped
yield on the benchmark 10-
year U.S. Treasury note was
1.611%, compared with 1.616%
on Monday. The yield on the
FLASH The SEC opened the door to
approving IEX in March when
the commission voted to pro-
pose that the IEX 350-micro-
sandth of a second.
The SEC’s staff has since re-
vised that interpretation and
plans to restrict the circum-
As part of the recommenda-
tion, the staff has supported
giving IEX what is known as a
“protected quote,” meaning
5.1% so far in June, sharply U.S. 10-year note fell as low as Continued from page B7 second speed bump could be stances under which a speed brokers would be required to
outpacing declines in other 1.569% earlier Tuesday, ac- lawyers wrote. considered “de minimis,” or of bump would be allowed, the send orders to IEX when it
sectors. The moves have come cording to Tradeweb. Nasdaq’s letter raised trivial impact, because orders people said. Some investor shows the best price across all
as bond yields have dropped U.S. crude oil fell 0.8% to alarms among the SEC lawyers already take longer than that groups had warned that grant- 13 national stock exchanges,
around the world, with the 10- $48.49 a barrel as the dollar who represent the agency to travel between exchange ing blanket permission for the people said. During the
year U.S. Treasury yield strengthened. when industry groups sue over systems in Chicago and New speed bumps of less than one long battle, IEX’s opponents
briefly falling to near a record In Asia, Japan’s Nikkei its decisions, according to one Jersey. Under that legal inter- millisecond could open the had lobbied the SEC to deny
low Tuesday, and as investors’ Stock Average fell 1% and of the people. Even so, the pretation of its rules, the SEC door to many varieties of time IEX that privilege, even if the
expectations for an interest- Hong Kong’s Hang Seng Index SEC still plans to make its de- would permit speed bumps delays, making it harder for exchange were to be approved.
rate rise in the next few lost 0.6%. The Shanghai Com- cision on Friday when com- that delay orders by less than brokers and investors to navi- That would have essentially
months have diminished. posite added 0.3%. missioners take their vote. a millisecond, or one-thou- gate the market. given IEX a hollow victory.
JEFFREY KLUGER
TIME EDITOR & CO-AUTOR OF APOLLO 13
SPA C E I S O U T T H ER E
L E T’ S G O FIND IT
IT’S YOUR UNIVERSE

PODCAST
TIME.COM/PODCASTS
@2016 Time Inc. TIME is registered trademarks of Time Inc.
MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
15859.00 t 160.18, or 1.00% Year-to-date t 16.68% 320.53 t 6.27, or 1.92% Year-to-date t 12.38% 2075.32 t 3.74, or 0.18% Trailing P/E ratio * 24.29 21.47
High, low, open and close for each 52-wk high/low20868.03 14952.61 High, low, open and close for each 52-wk high/low 406.80 303.58 High, low, open and close for each P/E estimate * 17.92 17.84
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 2.16 1.99
All-time high: 2130.82, 05/21/15
* P/E data based on as-reported earnings from Birinyi Associates Inc.
18000 360 2120

65-day moving average
17500 350 2090
17000 340 2060
16500 330 2030
Session high 65-day moving average

16000 320 2000
DOWN UP
65-day moving average
t
Session open Close
Close Open 15500 310 1970

t
Bars measure the point change from session's open

Session low
15000 300 1940
Mar. Apr. May June Mar. Apr. May June Mar. Apr. May June
International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2275.74 –27.66 –1.20 2033.03 • 2605.96 –2.6 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1575.00 –34.73 –2.16 1471.88 • 1956.39 –8.2 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 802.93 –6.53 –0.81 691.21 • 1044.05 1.1 3.250 Australia 2 1.601 88.7 92.5 84.5 133.2 1.635 1.590 2.062
4.250 10 2.058 44.9 50.1 58.6 62.6 2.112 2.286 3.023
Americas DJ Americas 498.87 –1.67 –0.33 433.38 • 522.25 2.4
3.500 Belgium 2 -121.4 -125.4 -85.6 -0.486 -0.508 -0.126
-0.500 -119.6
Brazil Sao Paulo Bovespa 48551.50 –1109.28 –2.23 37046.07 • 54977.70 12.0
0.800 10 0.311 -129.9 -130.8 -132.8 -115.9 0.303 0.372 1.239
Canada S&P/TSX Comp 13890.87 –103.01 –0.74 11531.22 • 14995.33 6.8
1.000 France 2 -0.438 -115.2 -114.6 -116.2 -85.4 -0.436 -0.416 -0.124
Mexico IPC All-Share 44574.83 –355.42 –0.79 39256.58 • 46545.32 3.7
0.500 10 0.428 -118.2 -119.6 -122.3 -117.2 0.415 0.477 1.226
Chile Santiago IPSA 3066.20 –5.46 –0.18 2730.24 • 3243.62 4.2
0.000 Germany 2 -0.577 -129.1 -125.3 -125.1 -90.8 -0.543 -0.505 -0.178
U.S. DJIA 17674.82 –57.66 –0.33 15370.33 • 18188.81 1.4
0.500 10 0.000 -160.9 -158.7 -157.2 -156.4 0.024 0.128 0.834
Nasdaq Composite 4843.55 –4.89 –0.10 4209.76 • 5231.94 –3.3
4.500 Italy 2 0.065 -64.9 -68.1 -80.4 -44.6 0.029 -0.058 0.284
S&P 500 2075.32 –3.74 –0.18 1810.10 • 2132.82 1.5
2.000 10 1.442 -16.8 -23.7 -22.0 -17.8 1.374 1.480 2.219
CBOE Volatility 20.58 –0.39 –1.86 10.88 • 53.29 13.0
0.100 Japan 2 -0.279 -99.3 -98.5 -99.3 -73.0 -0.275 -0.247 -0.000
EMEA Stoxx Europe 600 320.53 –6.27 –1.92 303.58 • 406.80 –12.4 0.100 10 -0.168 -177.7 -177.1 -181.0 -189.5 -0.160 -0.110 0.503
Stoxx Europe 50 2680.90 –52.19 –1.91 2556.96 • 3541.18 –13.5 0.500 Netherlands 2 -0.546 -126.0 -124.6 -125.0 -89.6 -0.536 -0.504 -0.167
Austria ATX 2095.02 –43.37 –2.03 1929.73 • 2567.85 –12.6 0.250 10 0.136 -147.3 -147.1 -148.0 -130.1 0.141 0.220 1.096
Belgium Bel-20 3306.59 –60.04 –1.78 3117.61 • 3867.21 –10.6 4.350 Portugal 2 0.468 -24.6 -44.0 -46.3 -69.5 0.271 0.283 0.035
France CAC 40 4130.33 –96.69 –2.29 3892.46 • 5217.80 –10.9 2.875 10 3.374 176.4 159.6 126.6 62.2 3.207 2.966 3.020
Germany DAX 9519.20 –138.24 –1.43 8699.29 • 11802.37 –11.4 4.500 Spain 2 0.023 -69.1 -70.6 -82.6 -54.5 0.004 -0.080 0.185
Greece ATG 593.45 –1.13 –0.19 420.82 • 805.67 –6.0 1.950 10 1.542 -6.8 -10.7 -9.3 -12.7 1.504 1.608 2.271
Hungary BUX 25831.00 0.41 0.002 20452.90 • 27477.51 8.0 4.250 Sweden 2 -0.553 -126.7 -124.9 -119.8 -88.1 -0.539 -0.452 -0.151
Israel Tel Aviv 1410.09 –2.35 –0.17 1383.34 • 1728.89 –7.8 1.000 10 0.454 -115.6 -112.8 -98.2 -137.4 0.483 0.718 1.024
Italy FTSE MIB 16271.35 –350.52 –2.11 15773.00 • 24157.39 –24.0 1.250 U.K. 2 0.350 -36.4 -33.4 -37.7 -6.3 0.377 0.369 0.667
Netherlands AEX 419.08 –9.12 –2.13 378.53 • 506.05 –5.1 2.000 10 1.148 -46.2 -40.0 -32.1 -39.5 1.212 1.379 2.003
Poland WIG 44729.08 –388.77 –0.86 41747.01 • 54449.16 –3.7 0.875 U.S. 2 0.714 ... ... ... ... 0.710 0.746 0.730
Russia RTS Index 900.19 –24.46 –2.65 607.14 • 989.87 18.9 1.625 10 1.610 ... ... ... ... 1.611 1.700 2.397
Spain IBEX 35 8126.70 –177.10 –2.13 7746.30 • 11612.60 –14.9
Sweden SX All Share 455.33 –7.52 –1.62 432.78 • 543.12 –9.9 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 7638.77 –143.58 –1.84 7425.05 • 9537.90 –13.4 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 51394.31 –1117.21 –2.13 45975.78 • 54760.91 1.4 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 6/13/2016
Turkey BIST 100 75759.53 –774.70 –1.01 68230.47 • 86931.34 5.6
One-Day Change Year Year
U.K. FTSE 100 5923.53 –121.44 –2.01 5499.51 • 6873.43 –5.1 Commodity Exchange Last price Net Percentage high low
442.00 6.50 1.49% 442.75 355.75
Asia-Pacific DJ Asia-Pacific TSM 1339.90 –10.55 –0.78 1188.42 • 1561.66 –6.0 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 1149.50 -9.50 -0.82% 1,186.25 868.00
Australia S&P/ASX 200 5203.30 –109.30 –2.06 4765.30 • 5706.70 –1.7
Wheat (cents/bu.)
CBOT
CBOT 500.00 -3.25 -0.65 533.75 460.00
China Shanghai Composite 2842.19 9.12 0.32 2655.66 • 4967.90 –19.7
Live cattle (cents/lb.) CME 114.400 0.050 0.04 125.350 110.925
Hong Kong Hang Seng 20387.53 –125.46 –0.61 18319.58 • 27404.97 –7.0
Cocoa ($/ton) ICE-US 3,105 -4 -0.13 3,241 2,745
India S&P BSE Sensex 26395.71 –1.06 –0.004 22951.83 • 28504.93 1.1
Coffee (cents/lb.) ICE-US 137.30 -2.00 -1.44 146.85 117.15
Japan Nikkei Stock Avg 15859.00 –160.18 –1.00 14952.61 • 20868.03 –16.7
Sugar (cents/lb.) ICE-US 19.47 -0.17 -0.87 19.94 12.92
Singapore Straits Times 2768.33 –17.10 –0.61 2532.70 • 3373.48 –4.0
Cotton (cents/lb.) ICE-US 64.14 0.06 0.09 66.45 54.19
South Korea Kospi 1972.03 –7.03 –0.36 1829.81 • 2107.33 0.5 Robusta coffee ($/ton) ICE-EU 1647.00 -34.00 -2.02 1,748.00 1,400.00
Taiwan Weighted 8576.12 39.90 0.47 7410.34 • 9476.34 2.9
Copper ($/lb.) COMEX 2.0425 -0.0110 -0.54 2.3290 1.9580
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1289.20 2.30 0.18 1,308.00 1,065.70
Silver ($/troy oz.) COMEX 17.420 -0.023 -0.13 18.060 13.810
Currencies London close on June 14 Aluminum ($/mt)* LME 1,582.00 -3.50 -0.22 1,675.00 1,451.50
Tin ($/mt)* LME 17,100.00 -100.00 -0.58 17,500.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Tue YTDchg Copper ($/mt)* LME 4,528.00 9.00 0.20 5,070.50 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,705.00 -26.00 -1.50 1,888.00 1,598.00
15%
Europe Zinc ($/mt)* LME 2,068.00 -14.00 -0.67 2,082.00 1,467.00
10 Bulgaria lev 0.5729 1.7456 –3.0 Nickel ($/mt)* LME 8,875.00 -125.00 -1.39 9,575.00 7,750.00
WSJ Dollar index
s
sYen Croatia kuna 0.1490 6.714 –4.2 Rubber (Y.01/ton) TCE 148.40 -1.00 -0.67 165.00 148.00
5
Euro zone euro 1.1209 0.8922 –3.1
Czech Rep. koruna-b 0.0414 24.147 –3.0 Palm oil (MYR/mt) MDEX 2469.00 -43.00 -1.71 2,707.00 2,374.00
0
Denmark krone 0.1507 6.6339 –3.5 Crude oil ($/bbl.) NYMEX 49.09 -0.43 -0.87 52.28 32.22
–5 s Euro Hungary forint 0.003564 280.59 –3.4 NY Harbor ULSD ($/gal.) NYMEX 1.5017 -0.0128 -0.85 1.5848 0.9406
Iceland krona 0.008085 123.69 –5.0 RBOB gasoline ($/gal.) NYMEX 1.5164 -0.0198 -1.29 1.6707 1.1485
–10 Norway krone 0.1197 8.3521 –5.5
0.2528 3.9558 0.8
Natural gas ($/mmBtu) NYMEX 2.691 0.009 0.34 2.7330 2.0090
2015 2016 Poland zloty
Russia ruble-d 0.01516 65.976 –8.2 Brent crude ($/bbl.) ICE-EU 51.32 -0.52 -1.00 54.12 33.05
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1205 8.3016 –1.7 Gas oil ($/ton) ICE-EU 447.50 -7.00 -1.54 472.50 285.50
Tue Tue
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0376 0.9638 –3.8
Turkey lira 0.3411 2.9319 0.5 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1289 7.7608 0.1
Ukraine hryvnia 0.0402 24.8610 3.6
Argentina peso-a 0.0726 13.7780 6.5
India rupee
Indonesia rupiah
0.0148
0.0000746
67.3560 1.7
13409 –3.1
U.K. pound 1.4131 0.7077 4.3 Cross rates London close on Jun 14
Brazil real 0.2864 3.4915 –11.8 Middle East/Africa
Japan yen 0.009429 106.05 –11.8
Canada dollar 0.7788 1.2840 –7.2 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002950 338.95 0.1 Bahrain dinar 2.6515 0.3771 0.01
Chile peso 0.001451 689.10 –2.8 Australia 1.3589 1.9202 1.4098 0.0128 0.1751 1.5229 1.0582 ...
Macau pataca 0.1252 7.9890 –0.2 Egypt pound-a 0.1126 8.8789 13.4
Colombia peso 0.0003329 3004.05 –5.4 Canada 1.2840 1.8141 1.3321 0.0121 0.1654 1.4388 ... 0.9446
Malaysia ringgit-c 0.2437 4.1036 –4.6 Israel shekel 0.2579 3.8770 –0.4
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7001 1.4284 –2.4 Kuwait dinar 3.3181 0.3014 –0.7 Euro 0.8922 1.2606 0.9258 0.0084 0.1150 ... 0.6949 0.6566
Mexico peso-a 0.0527 18.9783 10.3
Pakistan rupee 0.0096 104.550 –0.3 Oman sul rial 2.5970 0.3851 0.03 Hong Kong 7.7608 10.9667 8.0531 0.0732 ... 8.6980 6.0444 5.7119
Peru sol 0.3005 3.3280 –2.5
Philippines peso 0.0216 46.316 –1.2 Qatar rial 0.2748 3.639 –0.1 Japan 106.0540 149.8700 110.0500 ... 13.6650 118.8700 82.6138 78.0500
Uruguay peso-e 0.0325 30.810 3.0
Singapore dollar 0.7378 1.3553 –4.4 Saudi Arabia riyal 0.2667 3.7500 –0.1 0.9638 1.3618 ... 0.0081 0.1242 1.0802 0.7507 0.7093
Venezuela bolivar 0.100150 9.99 58.4 Switzerland
South Korea won 0.0008491 1177.65 0.1 South Africa rand 0.0653 15.3103 –1.1
U.K. 0.7077 ... 0.7343 0.0067 0.0912 0.7932 0.5512 0.5208
Asia-Pacific Sri Lanka rupee 0.0068989 144.95 0.5 Close Net Chg % Chg YTD % Chg
0.7359 1.3589 –1.0 Taiwan dollar 0.03085 32.419 –1.5 U.S. ... 1.4131 1.0376 0.0094 0.1289 1.1209 0.7788 0.7359
Australia dollar WSJ Dollar Index 86.79 0.38 0.44 –3.75
China yuan 0.1516 6.5950 1.6 Thailand baht 0.02833 35.300 –2.0 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon
Key Rates Top Stock Listings 4 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.44230% 0.18500% ¥ TakedaPharm 4502 4401.00 -1.08 -27.44 £ RioTinto RIO 1895.50 -2.87 -4.24 Last: 126.39 t 1.01, or 0.79% YTD t 7.2%
Three month 0.65480 0.28625 Asia Titans HK$ TencentHoldings 0700 168.30 -0.71 10.22 CHF RocheHldgctf ROG 240.60 -2.00 -12.95
150
Six month 0.93390 0.45185 HK$ AIAGroup 1299 44.70 -0.56 -4.08 ¥ TokioMarineHldg 8766 3398.00 -1.34 -27.89 £ RoyDtchShell A RDSA 1722.00 -2.82 12.84 High
One year 1.25325 0.78960
50–day
¥ AstellasPharma 4503 1520.50 -0.46 -12.19 ¥ ToyotaMtr 7203 5393.00 -0.64 -27.98 € SAP SAP 67.35 -1.23 -8.22 Close moving average 140
Euro Libor AU$ AustNZBk ANZ 23.65 -2.63 -15.32 AU$ Wesfarmers WES 40.13 -1.93 -3.56 € Sanofi SAN 67.30 -3.15 -14.38 Low t 130
One month -0.35900% -0.07214% AU$ BHP BHP 18.20 -3.19 1.90 AU$ WestpacBanking WBC 29.23 -2.40 -12.90 € SchneiderElectric SU 52.71 -2.37 0.29
Three month -0.28329 -0.01071 HK$ BankofChina 3988 3.21 0.63 -7.23 AU$ Woolworths WOW 21.16 -1.76 -13.63 € Siemens SIE 90.17 -1.51 0.32 120
Six month -0.16600 0.05643 HK$ CKHutchison 0001 89.05 -0.89 -14.70 € Telefonica TEF 8.44 -1.38 -17.52 110
One year -0.03257 0.17429 HK$ CNOOC 0883 9.41 0.21 16.60 Stoxx 50 € Total FP 40.05 -3.44 -0.98
100
Euribor ¥ Canon 7751 3001.00 -1.12 -18.34 CHF ABB ABBN 19.44 -1.47 8.24 CHF UBSGroup UBSG 13.32 -2.20 -31.76
One month -0.35300% -0.06400% ¥ CentralJapanRwy 9022 18445 -0.67 -14.61 € AXA CS 19.30 -1.53 -23.52 € Unilever UNA 38.15 -1.73 -4.89 18 25 1 8 15 22 29 6 13 20 27 3 10
Three month -0.26200 -0.01400 HK$ ChinaConstructnBk 0939 5.08 0.40 -4.33 € AirLiquide AI 90.26 -1.93 -12.92 £ Unilever ULVR 3068.50 -1.52 4.85 Apr. May June
Six month -0.15900 0.05100 HK$ ChinaLifeInsurance 2628 16.48 -0.72 -34.34 € Allianz ALV 128.55 -1.76 -21.40 £ VodafoneGroup VOD 209.55 -0.73 -5.18
One year -0.02100 0.16600 HK$ ChinaMobile 0941 86.80 -0.57 -0.80 € Anheuser Busch ABI 108.65 -0.96 -5.03 CHF ZurichInsurance ZURN 218.80 -0.64 -15.33
Yen Libor AU$ CmwlthBkAust CBA 73.52 -2.61 -14.04 £ AstraZeneca AZN 3774.00 -1.33 -18.25
DJIA Stoxx 50
One month -0.08943% 0.05929% ¥ EastJapanRailway 9020 9481.00 0.06 -17.20 € BASF BAS 66.46 -0.61 -6.02
16060 -0.59 -23.81 61.07 -4.08 -12.19 Last: 2680.90 t 52.19, or 1.91% YTD t 13.5%
Three month -0.04100 0.09714 ¥ Fanuc 6954 € BNP Paribas BNP 42.04 -2.26 -19.51 $ AmericanExpress AXP
Six month -0.01514 0.13500 ¥ Hitachi 6501 455.20 -0.24 -34.17 £ BT Group BT.A 396.60 -3.49 -15.92 $ Apple AAPL 97.46 0.12 -7.41 3000
One year 0.07693 0.25114 TW$ Hon Hai Precisn 2317 79.90 1.65 -1.11 € BancoBilVizAr BBVA 5.04 -2.27 -24.51 $ Boeing BA 130.50 0.45 -9.74
¥ HondaMotor 7267 2737.50 -1.39 -29.99 € BancoSantander SAN 3.62 -2.71 -20.47 $ Caterpillar CAT 74.86 -0.49 10.15 2925
Offer Bid
KRW HyundaiMtr 005380 138500 2.21 -7.05 £ Barclays BARC 160.05 -3.09 -26.88 $ Chevron CVX 101.26 -0.82 12.56 2850
Eurodollars
HK$ Ind&Comml 1398 4.13 0.49 -11.75 € Bayer BAYN 87.16 -1.02 -24.73 $ CiscoSystems CSCO 28.96 0.42 6.65
One month 0.5000% 0.4000%
45.04
2775
Three month 0.6500 0.5500
¥ JapanTobacco 2914 4112.00 -3.22 -8.03 £ BP BP. 358.20 -2.90 1.19 $ CocaCola KO -0.18 4.84
¥ KDDI 9433 2996.00 0.08 -5.01 £ BritishAmTob BATS 4072.00 -1.82 7.98 $ Disney DIS 98.42 0.87 -6.34 2700
Six month 1.0000 0.9000
¥ Mitsubishi 8058 1805.50 -1.39 -10.97 CHF FinRichemont CFR 56.10 -2.69 -22.19 $ DuPont DD 65.84 -1.36 -1.14 2625
One year 1.3000 1.2000
¥ MitsuUFJFin 8306 493.70 -2.18 -34.79 CHF CreditSuisse CSGN 11.39 -3.80 -46.96 $ ExxonMobil XOM 90.41 -0.20 15.98
Latest 52 wks ago
1230.50 -0.24 -14.87 $ GenElec GE 30.44 2.04 -2.28 18 24 1 8 15 22 29 6 13 20 27 3 10
¥ Mitsui 8031 € Daimler DAI 55.05 -2.34 -29.04
Apr. May June
Prime rates ¥ Mizuho Fin 8411 156.50 -1.26 -35.73 € Deutsche Bank DBK 13.16 -2.88 -41.58 $ GoldmanSachs GS 146.27 -1.59 -18.84
U.S. 3.50% 3.25% ¥ NTTDoCoMo 9437 2717.00 1.00 9.38 € DeutscheTelekom DTE 14.35 -1.71 -13.19 $ HomeDepot HD 125.28 -1.99 -5.27
Canada 2.70 2.85 AU$ NatAustBnk NAB 25.47 -2.30 -15.66 £ Diageo DGE 1748.00 -1.58 -5.84 $ Intel INTC 32.14 -0.09 -6.71
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥ NipponStl&SmtmoMtl 5401 1965.50
4555.00
0.46
0.57
-18.65
-5.81
€ ENI ENI 13.20 -1.86 -4.35 $
$
IBM
JPMorganChase
IBM
JPM
151.06
62.08
-0.15
-1.88
9.77
-5.98
Dow Jones Industrial Average P/E: 19
¥ NipponTeleg 9432 £ GlaxoSmithKline GSK 1393.50 -1.59 1.49
Policy rates ¥ NissanMotor 7201 1004.00 -0.50 -21.53 £ HSBC Hldgs HSBA 425.40 -1.28 -20.66 $ JohnsJohns JNJ 117.17 0.33 14.07 Last: 17674.82 t 57.66, or 0.33% YTD s 1.4%
ECB 0.00% 0.05% ¥ NomuraHldgs 8604 406.50 -2.05 -40.14 € INGGroep INGA 9.82 -1.48 -21.13 $ McDonalds MCD 122.51 -0.39 3.70
$ Merck MRK 56.25 0.25 6.49 18500
Britain 0.50 0.50 ¥ Panasonic 6752 894.50 -1.27 -27.89 £ ImperialBrands IMB 3563.50 -1.37 -0.64
Switzerland 0.50 0.50 HK$ PetroChina 0857 5.34 -1.29 4.91 € IntesaSanpaolo ISP 1.91 -3.48 -38.05
$ Microsoft MSFT 49.83 -0.62 -10.18 18000
Australia 1.75 2.00 HK$ PingAnInsofChina 2318 33.85 -0.73 -21.10 € LVMHMoetHennessy MC 137.10 -2.42 -5.38
$ NikeClB NKE 54.11 -1.46 -13.42
17500
U.S. discount 1.00 0.75 $ RelianceIndsGDR RIGD 28.95 -0.52 -5.39 £ LloydsBankingGroup LLOY 62.18 -3.19 -14.90
$ Pfizer PFE 35.00 0.75 8.43
Fed-funds target 0.25 0.00 43.47 -1.38 -2.77 $ Procter&Gamble PG 83.36 0.96 4.97 17000
AU$ RioTinto RIO € LOreal OR 158.70 -1.67 2.19
Call money 2.25 2.00 KRW SamsungElectronics 005930 1380000 0.66 9.52 £ NationalGrid NG. 959.60 -1.11 2.36
$ 3M MMM 167.58 0.27 11.25 16500
4414.00 -0.85 -20.47 $ TravelersCos TRV 112.55 -0.40 -0.27
Overnight repurchase rates ¥ Seven&I Hldgs 3382 CHF Nestle NESN 70.00 -1.34 -6.10 16000
5647.00 -1.14 -8.01 $ UnitedTech UTX 101.18 -0.03 5.32
U.S. 0.48% 0.22% ¥ SoftBankGroup 9984 CHF Novartis NOVN 73.55 -2.06 -15.26
3090.00 -2.03 -32.91 $ UnitedHealthGroup UNH 137.90 -0.14 17.22 18 24 1 8 15 22 29 6 13 20 27 3 10
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 DKK NovoNordiskB NOVO-B 343.00 -5.56 -14.23
89.95 -0.50 -4.05 $ VISAClA V 78.63 0.29 1.39 Apr. May June
HK$ SunHngKaiPrp 0016 £ Prudential PRU 1196.50 -2.25 -21.85
Sources: WSJ Market Data Group, SIX 162.00 ... 13.29
$ Verizon VZ 52.99 0.80 14.65 Note: Price-to-earnings ratios are for trailing 12 months
TW$ TaiwanSemiMfg 2330 £ ReckittBenckiser RB. 6595.00 -1.29 5.00
Financial Information, Tullett $ WalMart WMT 70.95 0.60 15.74 Sources: WSJ Market Data Group; Birinyi Associates
MONEY & INVESTING
Deutsche Bank Asia CEO to Leave Fund

Gunit Chadha is latest
high-level departure
the co-head of corporate bank-
ing and securities in Asia Pa-
Pursues
cific and the global invest-
as German lender
reshapes operations
ment-banking co-head over-
seeing securities trading.
Deutsche is one of many
1MDB
global investment banks oper- BY MIA LAMAR
BY JULIE STEINBERG ating in the Asia-Pacific region
to retool business lines, trim Abu Dhabi sovereign-wealth
In the latest high-level de- staffing and assess what re- fund International Petroleum
parture at Deutsche Bank AG, sources they need to make a Investment Co. said it is pur-
Gunit Chadha, the chief execu- profit while staying lean. suing arbitration in a London
tive officer for the Asia-Pacific The bank’s shares were court for about $6.5 billion it
region, is stepping down, the down 2.9% Tuesday afternoon says it is owed as a result of a
German lender said Tuesday. in Frankfurt and have dropped dispute with Malaysian state
Mr. Chadha, based in Singa- about 38% this year. investment fund 1Malaysia
pore, will leave the bank effec- In the Asia-Pacific region, Development Bhd.
tive July 17, according to a Deutsche had revenue of more The dispute erupted in
statement on the bank’s web- than €4 billion ($4.5 billion) in April, when IPIC accused
site. He became sole CEO of 2015, up 14% from a year ear- 1MDB of reneging on key pro-
the region in 2015, after serv- lier, according to a presenta- visions of an agreement last
ing since 2012 as co-CEO with tion earlier this year. year that saw it extend a bil-
Alan Cloete, who left Deutsche In investment banking, lion-dollar loan to 1MDB and
last year. which includes arranging assume responsibility for in-
STEFAN IRVINE FOR THE WALL STREET JOURNAL
Mr. Chadha, 54 years old, share sales and debt deals and terest payments on some of its
joined the bank in 2003 as advising on mergers and ac- debt. IPIC later said it would
chief executive for India. quisitions, Deutsche’s $142 only make those payments as
Deutsche Bank has been re- million in revenue places it an official guarantor on two
organizing its top ranks 10th in the Asia-Pacific region 1MDB bonds and that it in-
around the world, including in this year, according to data tended to pursue repayment
the Asia-Pacific region, as it provider Dealogic. from Malaysia’s Ministry of Fi-
reshapes its operations under In the same period last nance.
Chief Executive Officer John year, it also ranked 10th, with “The failure of 1MDB and
Cryan. It wasn’t immediately $178 million in revenue. It [Malaysia’s Ministry of Fi-
clear who would succeed Mr. trails firms including Morgan nance] to perform their obli-
Chadha. Stanley, Citic Securities and gations, cure their defaults or
Departures have included Goldman Sachs Group Inc. Gunit Chadha will leave in July. He joined Deutsche Bank in 2003 as chief executive for India. put forward acceptable pro-
posals has left IPIC in the po-
sition where it must pursue its
Libya Fund’s Lawsuit: Goldman Misled Us

claims in arbitration,” IPIC
said in a statement filed with
the London Stock Exchange
Tuesday.
BY SIMON CLARK to earn about $222 million. Goldman banker Youssef days, Mr. Zarti committed to and initially was due to last The Wall Street Journal in
Goldman disputes the amount Kabbaj “was quickly embedded the largest four disputed three months. It was extended April reported both sides were
Libya’s sovereign-wealth of profit it made. within the nascent institution” trades with Goldman, involv- a number of times. preparing to enter arbitration
fund, in a long-awaited trial “Libya had been an interna- and became close to the Lib- ing payments of more than Goldman says the intern- over their disagreement.
that started Monday, alleged tional pariah for decades, cut yan management team, law- $828 million. ship isn’t important. “We do 1MDB in a statement Tues-
Goldman Sachs Group Inc. off from much of the rest of yers for the Libyan fund During a visit to Dubai in not believe the internship in- day said its legal counsel will
took advantage of its lack of the world and from interna- wrote. Within Goldman, he early 2008 with Mr. Zarti’s fluenced in any way the LIA’s review IPIC’s request for arbi-
financial sophistication to tional financial markets,” law- was encouraged to “stay a lot” younger brother, Mr. Kabbaj decision to enter into the tration once it has been served
draw it into losing trades. yers for the fund wrote in in Tripoli, the lawyers wrote, paid $600 for “a pair of pros- trades,” the representative for with a copy. The fund also
Emails in the case show court documents. “In its isola- citing Goldman correspon- titutes to entertain them the bank said. said it remains able to honor
Goldman executives saying tion, Libya’s financial system dence. Mr. Kabbaj is no longer both,” according to the docu- The Securities and Ex- its current debt obligations.
that the Libyan fund had little was under-developed and un- at Goldman. ments submitted by the Liby- change Commission has
experience in finance. “They sophisticated, as were the in- “It’s important you stay su- ans. been—and still may be—scru-
are very unsophisticated—and dividuals who worked within per close to the client on a Mr. Kabbaj said in an inter- tinizing the internship, law-
Abu Dhabi’s
anyone could ‘rape’ them,” one it.” daily basis. Teach them, train view that he didn’t pay or ar- yers for the Libyan fund said. sovereign-wealth
executive wrote in 2008. “The claims are without them, dine them,” one execu- range for prostitutes for Mr. A representative for the SEC
In another internal email merit and we will continue to tive wrote to Mr. Kabbaj, the Zarti’s younger brother or any declined to comment.
fund says it is owed
exchange, a Goldman executive defend them vigorously,” a documents show. Another told official of the Libyan fund. He Banking internships about $6.5 billion.
wrote to a colleague that “you Goldman representative said. him that: “This is a once in a said that Goldman partners awarded to people connected
just delivered a pitch on struc- Libyan fund officials first career opportunity.” signed off on all his expenses to sovereign-wealth funds
tured leveraged loans to some- met executives from the U.S. In 2008, Mr. Kabbaj helped for the Libyan fund. Mr. Kab- have been investigated before. Investigators in at least
one who lives in the middle of bank in November 2006, court arrange an internship at the baj declined to comment on Last year, Bank of New York seven countries are probing
the desert with his camels.” documents presented by the bank for the younger brother whether he paid for a prosti- Mellon Corp. agreed to pay 1MDB, a fund set up by Malay-
Goldman denies wrongdo- Libyan fund show. The fund of Mustafa Zarti, an executive tute for himself. $14.8 million to settle allega- sian Prime Minister Najib
ing in the case, being tried in presented an investment op- at the Libyan fund. Mr. Kabbaj The Libyan fund describes tions that it violated U.S. anti- Razak in 2009 to boost
the High Court in London. The portunity that was “one of the texted Mustafa Zarti on April the internship that Goldman bribery laws when it gave in- growth. Some investigators
firm has declined to comment largest I’ve ever seen,” a Gold- 17, 2008, with the “good news” offered as “bespoke and ternships to family members have said they believe $6 bil-
on the email exchanges, which man executive wrote. “We are that the internship had been highly-coveted.” The intern- of officials affiliated with a lion has gone missing. Mr. Na-
were disclosed in the court all over them.” arranged. In the following ship started on June 23, 2008, Middle Eastern sovereign- jib and 1MDB have repeatedly
documents. wealth fund. An SEC investiga- denied wrongdoing. Malaysia’s
At issue are derivatives tion found the family members attorney general, Mohamed
trades made eight years ago. didn’t meet the “rigorous cri- Apandi Ali, cleared Mr. Najib
Between January and April teria” to join the bank’s in- of wrongdoing in January.
2008, the Libyan Investment ternship program, yet they 1MDB says it is cooperating
Authority, or LIA, entered into were hired to help the bank with the investigations.
nine financial-derivative trans- keep the sovereign-wealth Credit raters have warned
actions with Goldman. Those fund’s business. The bank nei- that the dispute could result in
trades expired worthless in ther admitted nor denied the a large tab for the Malaysian
2011. SEC’s findings. government to settle 1MDB’s
The Libyan fund wants The Libyan fund’s assets worsening affairs. Moody’s In-
Goldman to repay $1.2 billion were valued at $67 billion in vestors Service in April esti-
to cover its losses from the 2012. Most of the assets cur- mated total potential 1MDB li-
JUSTIN LANE/EUROPEAN PRESSPHOTO AGENCY
equity-derivatives trades. It al- rently are frozen by United abilities to the

leges in court documents that Nations and European Union Malaysian government—in-
Goldman executives exerted sanctions because of continu- cluding $6 billion it estimated
“undue influence” over offi- ing conflict in Libya. could stem from the IPIC dis-
cials at the new sovereign- The fund has been the sub- pute, slightly less than claimed
wealth fund. The fund was ject of a power struggle be- by IPIC Tuesday—at roughly
created in 2006 to manage in- tween two rival chairmen loyal $7.5 billion, or 2.5% of the
come from Libya’s oil fields af- to competing Libyan govern- country’s economic output last
ter the country was removed ments that emerged in the year.
from the U.S. government’s list civil war following the death IPIC’s claim comes at a time
of state sponsors of terrorism. of Moammar Gadhafi in 2011. when the oil-rich emirate is
The fund claims Goldman Both chairmen support the grappling with the impact of
abused a relationship of trust The case is being tried in the High Court in London. ‘The claims are without merit,’ Goldman says. lawsuit against Goldman. lower oil prices. Governments
across the Gulf region have
been forced to cut spending
COFFEE gap had widened to more than

61 cents as of Tuesday.
Robusta for July delivery
closed at $1,618 a ton on ICE
more than three decades that
year at $3 a pound, boosted by
limited supply and a new ap-
petite in tea-drinking emerg-
tion, according to the Interna-
tional Coffee Organization, an
intergovernmental body.
The country exported so
to taste the “graham cracker,
sweet toffee and toasted ha-
zelnuts” detected at the farm
where the now two-year-old
and accelerate economic re-
forms in response to widening
budget deficits.
Abu Dhabi set up IPIC in
Continued from page B7 Futures Europe on Tuesday. ing markets such as China. much coffee earlier this year coffee was grown. The coffee 1984 to invest part of the
said Judith Ganes Chase, pres- Some of the beans are so Overproduction followed, and when prices were favorable tasted like the jute bag it was emirate’s oil-income surplus
ident of commodities research old that most lenders won’t al- the beans arrived just in time that the country’s coffee-ex- shipped in, she said. into the energy sector. Under
firm J. Ganes Consulting LLC low buyers to use them as col- for emerging-market growth porting organization said Bra- “It reminds me of cedar. Or the fund’s previous managing
of New York. lateral, according to a person to slow. By 2013, arabica fu- zil needed to dip into old a toothpick,” Ms. Caran said. director, Khadem Al Qubaisi,
In addition, droughts in the familiar with industry-lending tures prices had fallen to $1 a stocks to meet the nation’s de- “This isn’t a coffee we’d sell.” IPIC rapidly expanded across
robusta-growing regions of practices. Beans over two pound. mands. It is a coffee you can sur- the globe, investing in assets
Brazil and production delays years old are typically as- Producers stored their cof- The difference between a vive, however. such as Japan’s Cosmo Oil and
in places such as Indonesia signed little or no value, the fee rather than sell it cheaply. one-year-old cup of java and “Even if the beans get Spanish petroleum company
have pushed the price of ro- person said. The average age of beans sit- two-year-old coffee for dis- moldy, you’re roasting them CEPSA. Mr. Al Qubaisi was dis-
busta up 5.8% this year, which The now-declining glut of ting in coffee exchange-certi- cerning drinkers can be strik- above 200 degrees Celsius missed last year without ex-
recently narrowed the gap be- stored coffee got its start in fied warehouses peaked at 853 ing. Allie Caran, an educator (392 degrees Fahrenheit), way planation.
tween the two varieties to less 2011. Futures for arabica cof- days in February 2015, up 80% at coffee roaster Toby’s Estate above boiling water,” said Bill For years, 1MDB relied on
than 50 cents a pound. The fee hit their highest price in from two years earlier, accord- in Brooklyn, roasted two Bra- Ristenpart, a professor in support from Abu Dhabi to
ing to data from the ICE Fu- zilian coffees at a recent tast- chemical engineering and ma- grow the fund. The Abu Dhabi
tures U.S. exchange. Producers ing, one two years old and one terials science and researcher government hasn’t so far pub-
are now beginning to unload from Brazil’s most recent har- with the University of Califor- licly commented on the 1MDB
that coffee, reducing the aver- vest. nia, Davis, Coffee Initiative, a affair.
age age to 648 days, ICE data Both were roasted that day, research and educational pro- —Nicolas Parasie
show. That is still an old bean, she said, but it was impossible gram. “It kills everything.” contributed to this article.
but the shrinking average age
is a sign that the oldest are
leaving storage for the mar-
ketplace.
Advertisement INTERNATIONAL INVESTMENT FUNDS
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Morningstar, Ltd. or this publication. Funds shown aren’t registered with the
For information about listing your funds,
Jacob Thornhill is the main coffee roaster at Toby’s Estate in to use a larger amount of that U.S. Securities and Exchange Commission and aren’t available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
please contact: Freda Fung tel: +852 2831
Brooklyn. The company doesn’t sell older beans. crop to supply its own popula- All performance figures are calculated using the most recent prices available. 2504; email: freda.fung@wsj.com
Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
Fed Keeps Eye on Bigger Picture OVERHEARD Consumers

In U.S. Stay
Plunging government- rope, which is the opposite One of the world’s most
Downsizing
bond yields, the looming
threat of “Brexit” and the
twists and turns of central
Ten-year government-bond yields
of what central banks in
those places had wanted.
They have had to adopt in-
valuable soccer clubs can
boast the world’s costliest
chest-front advertising. But it
Confident
banks in the U.S. and else- 2.5% creasingly extreme monetary isn’t a victory to cheer. Investors have plenty of
End of 2015
where are testing investors. June 2016 policies, which have become Guangzhou Evergrande things to worry about. Amer-
2.0
They also are showing how a source of skepticism, not Taobao F.C., mostly owned by icans’ willingness to spend
strangely connected and re- 1.5 reassurance, for investors. developer Evergrande Real isn’t one of them.
flexive global markets have This has pushed cash into Estate and Alibaba, has been U.S. retail sales rose by
become. 1.0 haven government bonds, ordered by a Chinese court to 0.5% in May from a month
Yields on German 10-year driving the bund yield below pay $3.8 million to last sea- earlier, the Commerce De-
bonds went negative for the 0.5 zero. Falling global yields son’s regular shirt sponsor, partment reported Tuesday,
first time Tuesday as inves- have boosted the allure of Donfeng Nissan. more than expected coming
tors grew increasingly ner- 0 U.S. bonds for foreign inves- The penalty was awarded after April’s big 1.3% gain.
vous that the U.K. will vote -0.003 tors. The odd consequence: because the soccer club re- Control sales—a gauge of the
–0.5
to leave the European Union Even as the Fed has em- placed Donfeng Nissan’s logo underlying pace of consumer
at its June 23 referendum. U.S. U.K. Germany Japan barked on raising rates, with that of Evergrande Life, spending—rose 0.4%, and
That is one of several rea- Sources: FactSet; Bloomberg News (photo) ‘Vote Leave’ rally in yields have fallen. Low rates an insurer owned by the April’s control sales gain was
sons why the U.S. Federal Re- THE WALL STREET JOURNAL. Manchester, U.K. are encouraging companies club’s biggest shareholder, for revised slightly higher too.
serve is unlikely to announce to borrow, pushing up lever- one game: the Asian Champi- This added to evidence
a rate increase on Wednes- add to the list of markets global growth and loose age in the U.S. and emerging ons League finals in Novem- that the economy is bounc-
day. The lack of action by the struggling to revamp their monetary policy have embed- markets. That has added an- ber. Dongfeng Nissan, which ing back from a weak first
Fed in turn is a reason why economies, which already in- ded an appetite for income: other risk to the economy. paid $12 million for a full-sea- quarter. Forecasting firm
the Bank of Japan and the cludes China, Japan, the eu- bonds, loans and dividend The status quo could hold, son sponsorship, sued the Macroeconomic Advisers,
European Central Bank have rozone and emerging-market stocks. That has distorted as there is no obvious pros- club and won. which a week ago estimated
had to step up their stimulus. nations dealing with the fall- markets, also making it pect for a more synchronized That leaves majority share- gross domestic product
That in turn has driven down out from the end of the com- harder for the Fed to act. global recovery. Brexit could holder, Evergrande Real Es- would grow at a 2.2% annual
bond yields in Europe and modities boom. All of that The problem is, the U.S. is generate a fresh wave of tur- tate, footing a $3.8 million bill rate in the second quarter,
Japan. could keep the Fed on hold the only big country where moil. But the longer this situ- for a one-game deal. For com- raised its estimate to 2.6%.
All of this makes sense. If through the summer. the economy may be healthy ation and the search for yield parison, Manchester United’s The sales strength also
the U.K. leaves the EU, that This picture has profound enough to raise rates. By not persists, the more challenges $560 million seven-year spon- bolsters the case that the
would increase economic un- consequences for investors. acting, the Fed has allowed investors will face if the sorship with Chevrolet is weakness in the May jobs re-
certainty, as it seeks to rede- The road map from previous the dollar to weaken this world economy breaks from worth about $1.4 million per port was ephemeral. Con-
fine its relationship with the recoveries is outdated and year, effectively boosting its muddle-through path. game. What an own goal. sumers don’t appear all that
rest of the world. It would uncertainty is high. Sluggish currencies in Japan and Eu- —Richard Barley worried about the employ-
ment picture.
This isn’t enough to prod
Adidas Investors Should Consider Taking a Shot on Goal the Federal Reserve to raise
rates on Wednesday, but it
does lift the odds of an in-
Possession is only valu- Now it may be time to box retailer Sports Author- lems to fix, which could crease in July. Still, given
able if you end up scoring. crystallize gains. ity has hit sentiment. Adi- weigh on sentiment. Mr. Ror- Sweat Spot the Fed’s caution, much
Investors skillful enough to The key warning sign is das’s weakness in North sted is likely to focus on Adi- Price/earnings ratios, next 12 would have to go right with
have held on to shares in valuation. On 25 times for- America is thus proving a das’s operating margins, months the economy between now
German sportswear group ward earnings, according to temporary advantage. But which are half those of Nike, Adidas Nike and then for it to move.
Adidas should think about FactSet, Adidas stock is this could unwind. and the embattled U.S. busi- 30 Put differently, if the Fed
kicking the ball into the net. more highly valued now than It also is hard to see ness, which has fallen behind 20 feels comfortable enough
The Euro 2016 soccer it has been for at almost two scope for further upgrades challenger brand Under Ar- about the economy to raise
tournament opened in Paris decades. Exceptionally, it at Adidas. The rush among mour. 10 rates in July, investors also
last Friday, marking the start also is more highly valued retailers to buy inventory in But sorting out the U.S. will have cause to feel pretty
0
of a summer of high-profile than that of rival Nike, even advance of summer could will require massive invest- comfortable. The bigger dan-
sporting events. though the U.S. group has give way to a post-summer ment at a time of fierce com- 1996 ’00 ’10 ger for U.S. stocks probably
Business at Adidas has higher margins and a better lull as they clear shelves. petition. Any turnaround Source: FactSet lies in all the other things
been flying. The first quarter growth record. The comparative numbers seems likely to take years. THE WALL STREET JOURNAL. that could keep the Fed on
was its best in a decade, This anomaly is partly due from last year also get Admittedly, Nike and Adi- hold, including Britain’s vote
with organic-revenue growth to problems in the U.S., tougher in the second half. das deserve their premiums But investors may have on leaving the European
of 22%. That prompted man- where Nike is the undisputed The big unknown is the in today’s low-growth envi- gotten ahead of themselves Union next week.
agement to lift its growth market leader. The company arrival of a new chief execu- ronment. Consumers are in cheering the latter’s re- Just because consumers
forecast for the year to 15%. disappointed analysts with tive, Kasper Rorsted, in Oc- adopting ever more active, cent progress. are feeling comfortable
The shares, up 66% year over 14% organic growth in its tober. New bosses have a casual lifestyles, and buying Adidas shares are overdue doesn’t mean the Fed, or in-
year, have enjoyed a phe- most recent results, while way of resetting expecta- more sneakers and sweaters for a breather. vestors, get to as well.
nomenal run. the bankruptcy filing of big- tions and identifying prob- to suit. —Stephen Wilmot —Justin Lahart
MONEY & INVESTING
AUDIT Finance
some of the people said. There
is no guarantee the deal will
take place.
Continued from page B7 Watch Leveraged loans are a private

variant of junk bonds. Banks
Debate over the SEC’s Loan make the loans to companies
Rule has intensified with the with below-investment-grade
proliferation of so-called omni- credit ratings and offload them
bus accounts that broker affili- to professional investors such as
ates of banks use to pool to- METLIFE mutual funds, hedge funds and
gether customer transactions. insurance companies. Issuers of
These accounts can nominally
Insurer to Let CEO the loans don’t need to publicly
give a lender a big stake in a Remain Past 65 report financial information be-
mutual fund even though the MetLife Inc. has waived its cause the debt is sold privately
shares actually are owned by retirement policy for Steven to investors who are thought to
many individual investors. The Kandarian, a strong show of be more sophisticated.
fund industry says those ac- support for the chairman and Uber is hoping to price the
counts are tripping the rule’s chief executive of the U.S.’s larg- loan with a yield of 4% to 4.5%,
threshold even when there est life insurer. some of the people said, but it
RICHARD B. LEVINE/ZUMA PRESS
isn’t really a conflict. The move allows the 64-year- is unclear whether the company
PwC has told clients one or old Mr. Kandarian to continue in will achieve a rate that low, es-
more of its lenders own stakes the top job past his birthday pecially given it is a first-time is-
of 10% or more in mutual funds next March. The company said suer.
audited by PwC, but that this the board has the option of lift- The average yield on new lev-
ownership doesn’t compromise ing a requirement that CEOs eraged loans ranges from 3.9%
its objectivity or impartial- step down at age 65 “when it to 5.5%, according to data from
ity, according to fund compa- concludes such a move would be S&P Capital IQ LCD.
nies’ filings. But the firm The question: Did PricewaterhouseCoopers maintain an independent relationship with its clients? in the company’s best interest.” —Maureen Farrell
also has informed the compa- Mr. Kandarian has been presi-
nies that the SEC may disagree. tor, PwC’s, relationships with effect” on the funds, Black- said he hopes the industry dent and CEO since May 2011 PLATINUM PARTNERS
Under the SEC’s interpreta- various lenders” because of Rock, Delaware, Invesco and soon will receive “practical and added the title of chairman
tion, some such situations in- the SEC’s Loan Rule. Goldman said in their filings. guidance from the SEC that in January 2012. MetLife’s last
Main Hedge Fund
volving PwC may violate the It isn’t clear when the SEC Funds are worried that avoids unreasonable costs and CEO, C. Robert Henrikson, To Be Unwound
rule, “calling into question might decide what position it their already limited choice of needless disturbance for fund stepped down as he was about Platinum Partners, the
PwC’s independence,” accord- will enforce, and it could re- auditors could be narrowed investors.” to turn 65. hedge-fund firm at the center of
ing to filings from BlackRock, solve the matter by issuing further if the SEC were to dis- The SEC hasn’t told funds The decision to extend Mr. a federal investigation into al-
Delaware and Invesco Inc. new guidance for such rela- qualify firms because of con- what they should do, and so Kandarian’s tenure comes at a leged New York City union kick-
Another PwC client, mu- tionships going forward, fund flicts under the Loan Rule. the fund industry is “caught in critical juncture in the company’s backs, plans to unwind its main
tual-fund giant Vanguard lawyers say. But if the commis- Some in the fund industry the middle here,” said Robert history. Under Mr. Kandarian, hedge fund, the firm told inves-
Group, hasn’t mentioned the sion finds PwC doesn’t have want the SEC to simply clarify Plaze, a lawyer with Stroock & MetLife successfully challenged tors in a conference call on
Loan Rule in its filings. A the required independence the existing rules. David Blass, Stroock & Lavan LLP and a in U.S. federal court its federal Tuesday.
spokeswoman said Vanguard is from its clients, and the funds general counsel of the Invest- former senior staff member in designation as a “systemically Federal agents last week ar-
“currently in the process of an- have to undergo new audits, it ment Company Institute, a the SEC’s investment-manage- important” company, which rested Murray Huberfeld, who
alyzing our independent audi- could have “a material adverse fund-industry trade group, ment division. would have meant heightened had previously run the credit
oversight by the Federal Re- fund at Platinum Partners, for
serve. After winning a nullifica- his role in allegedly bribing the
STREET slowly.
The cliché has it that mar-
kets hate uncertainty, and it’s
true. But there is something
of Treasurys by Standard &
Poor’s, while falling shares
and investors’ search for
safety worsened the second
If Britain votes to remain, it
is natural to expect a big snap
back in everything that has
sold off, boosting sterling, the
tion of the designation in March,
MetLife is still in court as fed-
eral regulators appeal the ruling.
—Leslie Scism
president of the New York City
correction officers’ union in ex-
change for an investment of
union money into the firm.
Continued from page B7 deeper going on: Investors are round of the eurozone crisis. euro, peripheral country bonds Platinum founder Mark Nor-
in Europe. trying to price a binary risk— In the case of Brexit, there and shares, and hurting safe UBER dlicht told investors Tuesday
U.S. markets haven’t been Britain either leaves or reis debate on whether the ef- bonds and the Swiss franc. that the allegations are false.
immune, either. While the S&P mains in the EU—using instru- fects for the rest of the world And this is the problem fac-
Company Seeks Loan Last week, Mr. Huberfeld de-
500 still isn’t far from its 2015 ments not designed for the would extend beyond a sum- ing investors. No investor Of Up to $2 Billion clined to comment after a court
peak, there has been a sudden job. Just as with the Scottish mer selloff. But in the short should bet their portfolio on Uber Technologies Inc. is hearing.
jump in the cost of using op- referendum on leaving the U.K. run, it is hard to believe that the toss of a coin, but diversi- turning to the so-called lever- Platinum executives are also
tions to protect against falls in in 2014, or the standoff over Brexit is fully priced in, mean- fying between heads and tails aged-loan market for the first considering shutting down Mr.
share prices. the U.S. debt ceiling in 2011, ing it would trigger a sharp amounts to accepting they will time to raise as much as $2 bil- Huberfeld’s former fund, the
The VIX measure of implied investors kept their fingers drop in the pound, at the very win nothing. lion, in a sign of the popular smaller of Platinum’s two. A fi-
volatility, widely known as crossed that nothing bad least. After Brexit, investors Investors who have a strong ride-sharing network’s hunger nal determination on the funds’
Wall Street’s “fear gauge,” is would happen until the risk are sure to look to EU fault- view on the outcome could for cash as it expands around future has yet to be reached, a
actually a proxy for the cost of became so obvious that they lines, putting the peripheral make a lot of money if they’re the world. person close to the firm said.
options. It has leapt from un- could no longer ignore it. countries in focus along with right, or lose a lot if they’re Uber has hired Morgan Stan- Together, the funds manage
der 14 on Thursday to briefly Both the Scottish and U.S. potential for exit pressure to wrong. Investors who merely ley and Barclays PLC to sell a more than $1 billion, according
pass 22 on Tuesday. Moves cases led to sharp selloffs. In build in Denmark, Sweden or want to hedge against loss in leveraged loan of $1 billion to $2 to Platinum’s website. The final
like this in the past almost al- the U.S., the standoff had the Netherlands. Already, im- case of Brexit have to accept billion to institutional investors, liquidation of either or both
ways accompanied a big fall in long-lasting effects even after plied volatility for Sweden’s the cost means they will un- people familiar with the matter funds could take at least several
shares, but so far the equity it was resolved. The political currency has jumped to the derperform badly if Britain said. The company plans to is- months, the firm told investors.
market has dropped only drama triggered a downgrade highest since last summer. stays in. sue the debt in coming weeks, —Rob Copeland

German 10-Year Yield Below Zero: How Busy Ceos Make It All Work

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